On January 15, 2022, the entity formally retired all the 30,000 treasury shares. The treasury shares were originally issued at P10 per share. • The entity owned 10,000 shares of LAW Company purchased for P800,000. The LAW shares were included in non-current equity securities. • On December 31, 2022, the entity declared a dividend in kind of one share of LAW for every hundred ordinary shares held by a shareholder. • The fair value of the LAW share is P90 on December 31, 2022. The dividend in kind was distributed on March 15, 2023 when the fair value of LAW share is P95. • On December 31, 2022, the entity declared the yearly cash dividend on preference share, payable on January 15, 2023. Profit for 2022 was P3,000,000. 1. What amount should be charged to retained earnings for the retirement of treasury shares on January 15, 2022? [Select] 2. What amount should be charged to retained earnings for the property dividend on ordinary shares on December 31, 2022? [ Select ] 3. What amount should be charged to retained earnings for the preference dividend declared on December 31,2022? [ Select ] 4. What amount should be reported as retained earnings on December 31, 2022? [ Select ] CFAS Company had the following shareholders' equity on January 1, 2022: Preference share capital, P100 par, 10% 2,000,000 cumulative Ordinary share capital, no par, P5 stated 5,150,000 value Share premium 3,500,000 Retained earnings 4,000,000 Treasury ordinary shares 400,000
On January 15, 2022, the entity formally retired all the 30,000 treasury shares. The treasury shares were originally issued at P10 per share. • The entity owned 10,000 shares of LAW Company purchased for P800,000. The LAW shares were included in non-current equity securities. • On December 31, 2022, the entity declared a dividend in kind of one share of LAW for every hundred ordinary shares held by a shareholder. • The fair value of the LAW share is P90 on December 31, 2022. The dividend in kind was distributed on March 15, 2023 when the fair value of LAW share is P95. • On December 31, 2022, the entity declared the yearly cash dividend on preference share, payable on January 15, 2023. Profit for 2022 was P3,000,000. 1. What amount should be charged to retained earnings for the retirement of treasury shares on January 15, 2022? [Select] 2. What amount should be charged to retained earnings for the property dividend on ordinary shares on December 31, 2022? [ Select ] 3. What amount should be charged to retained earnings for the preference dividend declared on December 31,2022? [ Select ] 4. What amount should be reported as retained earnings on December 31, 2022? [ Select ] CFAS Company had the following shareholders' equity on January 1, 2022: Preference share capital, P100 par, 10% 2,000,000 cumulative Ordinary share capital, no par, P5 stated 5,150,000 value Share premium 3,500,000 Retained earnings 4,000,000 Treasury ordinary shares 400,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![On January 15, 2022, the entity formally retired all the 30,000 treasury shares. The treasury shares were
originally issued at P10 per share.
• The entity owned 10,000 shares of LAW Company purchased for P800,000. The LAW shares were
included in non-current equity securities.
• On December 31, 2022, the entity declared a dividend in kind of one share of LAW for every hundred
ordinary shares held by a shareholder.
• The fair value of the LAW share is P90 on December 31, 2022. The dividend in kind was distributed on
March 15, 2023 when the fair value of LAW share is P95.
• On December 31, 2022, the entity declared the yearly cash dividend on preference share, payable on
January 15, 2023.
Profit for 2022 was P3,000,000.
1. What amount should be charged to retained earnings for the retirement of treasury shares on January 15,
2022? [Select]
2. What amount should be charged to retained earnings for the property dividend on ordinary shares on
December 31, 2022? [ Select ]
3. What amount should be charged to retained earnings for the preference dividend declared on December
31,2022? [ Select ]
4. What amount should be reported as retained earnings on December 31, 2022?
[ Select ]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F73b73d30-6926-48b5-93ec-64989c135549%2Ff1b82ad0-7f17-4c12-bb86-18f531f1ea38%2Fw0voxbt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 15, 2022, the entity formally retired all the 30,000 treasury shares. The treasury shares were
originally issued at P10 per share.
• The entity owned 10,000 shares of LAW Company purchased for P800,000. The LAW shares were
included in non-current equity securities.
• On December 31, 2022, the entity declared a dividend in kind of one share of LAW for every hundred
ordinary shares held by a shareholder.
• The fair value of the LAW share is P90 on December 31, 2022. The dividend in kind was distributed on
March 15, 2023 when the fair value of LAW share is P95.
• On December 31, 2022, the entity declared the yearly cash dividend on preference share, payable on
January 15, 2023.
Profit for 2022 was P3,000,000.
1. What amount should be charged to retained earnings for the retirement of treasury shares on January 15,
2022? [Select]
2. What amount should be charged to retained earnings for the property dividend on ordinary shares on
December 31, 2022? [ Select ]
3. What amount should be charged to retained earnings for the preference dividend declared on December
31,2022? [ Select ]
4. What amount should be reported as retained earnings on December 31, 2022?
[ Select ]
Transcribed Image Text:CFAS Company had the following shareholders' equity on January 1, 2022:
Preference share capital, P100 par, 10%
2,000,000
cumulative
Ordinary share capital, no par, P5 stated
5,150,000
value
Share premium
3,500,000
Retained earnings
4,000,000
Treasury ordinary shares
400,000
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