1. what id the total shareholder's equity on december 31, 20192. compute for the retained earnings on december 31, 2019 The shareholders' equity section of Good Life Company shows the following on December 31, 2018:Ordinary shares, P10 par value; authorized 1,500,000shares; issued and outstanding 900,000 sharesShare PremiumP9,000,000750,000Retained earningsTotal shareholders' equity2,700,000P12,450,000Transactions during 2019 and other information relating to the shareholders' equity accounts were asfollows:On January 2, Good life reacquired 75,000 shares of its ordinary shares for P11 per share.On May 14, Good life sold 45,000 shares of its treasury shares for P14 per share.• On June 15, Good life declared a cash dividend of P1 per share, payable on July 15, 2019 toshareholders of record on June 30, 2019.On December 20, 30,000 shares were issued in exchange for second hand equipment. Itoriginally cost P600,000, was carried by the previous owner at a book value of P300,000, andwas recently appraised at P390,000.• Net income for 2019 was P850,000.

Net income: Residual income after making deduction for all the expenses including income tax…

Answered: 1. what id the total shareholder's…

1. what id the total shareholder's equity on december 31, 2019 2. compute for the retained earnings on december 31, 2019

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1. what id the total shareholder's equity on december 31, 2019

2. compute for the retained earnings on december 31, 2019

The shareholders' equity section of Good Life Company shows the following on December 31, 2018:
Ordinary shares, P10 par value; authorized 1,500,000
shares; issued and outstanding 900,000 shares
Share Premium
P9,000,000
750,000
Retained earnings
Total shareholders' equity
2,700,000
P12,450,000
Transactions during 2019 and other information relating to the shareholders' equity accounts were as
follows:
On January 2, Good life reacquired 75,000 shares of its ordinary shares for P11 per share.
On May 14, Good life sold 45,000 shares of its treasury shares for P14 per share.
• On June 15, Good life declared a cash dividend of P1 per share, payable on July 15, 2019 to
shareholders of record on June 30, 2019.
On December 20, 30,000 shares were issued in exchange for second hand equipment. It
originally cost P600,000, was carried by the previous owner at a book value of P300,000, and
was recently appraised at P390,000.
• Net income for 2019 was P850,000.

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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