At the beginning of current year, Franta Company was authorized to issue share capital of 100,000 shares with P50 par value. The entity had the following share capital transactions during the year: Jan. 1 Sold 80,000 shares at P60 per share. May 1 Reacquired 4,000 treasury shares at P65 per share. Jul. 1 Approved a share split of 5 for 1. Oct. 31 Issued a 10% share dividend when the market value of a share is P25. Dec. 31 Reissued all of the treasury shares at P30. Dec. 31 Net income for the year was P3,000,000. If cash dividends of P2 is declared and paid at year-end, how much should be debited to accumulated profits for this cash dividends ?

At the beginning of current year, Franta Company was authorized to issue share capital of 100,000 shares with P50 par value. The entity had the following share capital transactions during the year: Jan. 1 Sold 80,000 shares at P60 per share. May 1 Reacquired 4,000 treasury shares at P65 per share. Jul. 1 Approved a share split of 5 for 1. Oct. 31 Issued a 10% share dividend when the market value of a share is P25. Dec. 31 Reissued all of the treasury shares at P30. Dec. 31 Net income for the year was P3,000,000. If cash dividends of P2 is declared and paid at year-end, how much should be debited to accumulated profits for this cash dividends ?

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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