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At December 31, 2019 and 2020, ABC Company had 30,000 shares of P100 par value 5% cumulative preference share capital outstanding. No dividends were in arrears as of December 31, 2018. ABC did not declare a dividend during 2019. During 2020, ABC paid a cash dividend of P100,000 on its preference share. ABC should report preference dividend in arrears in its 2020 financial statements as  a. accrued liability of P150,000 b. disclosure of P150,000 c. accrued liability of P200,000 d. disclosure of P200,000

At December 31, 2019 and 2020, ABC Company had 30,000 shares of P100 par value 5% cumulative preference share capital outstanding. No dividends were in arrears as of December 31, 2018. ABC did not declare a dividend during 2019. During 2020, ABC paid a cash dividend of P100,000 on its preference share. ABC should report preference dividend in arrears in its 2020 financial statements as  a. accrued liability of P150,000 b. disclosure of P150,000 c. accrued liability of P200,000 d. disclosure of P200,000

FINANCIAL ACCOUNTING
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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At December 31, 2019 and 2020, ABC Company had 30,000 shares of P100 par value 5% cumulative preference share capital outstanding. No dividends were in arrears as of December 31, 2018. ABC did not declare a dividend during 2019. During 2020, ABC paid a cash dividend of P100,000 on its preference share. ABC should report preference dividend in arrears in its 2020 financial statements as 

a. accrued liability of P150,000

b. disclosure of P150,000

c. accrued liability of P200,000

d. disclosure of P200,000

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