Answered: ABC Corporation declared 25% bonus…

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Accounting

ABC Corporation declared 25% bonus issue to its ordinary shareholders on December 31,2021. As

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 25E

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

ABC Corporation declared 25% bonus issue to its ordinary shareholders on December 31,2021. As of this date, the corporation have a balance in their ordinary share capital account of P 5,000,000 with par value of P 50. No shares were reacquired by the corporation from its shareholders.Assuming the current market value of the share at the date of declaration is P 52, How much is charged to Retained Earnings?

a. 1,250,000

b. 1,300,000

c. 1,000,000

d. 1,500,000

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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