FIVE CORP. declared P1,800,000 cash dividends to its preference and ordinary shareholders out of its profits in 2018. No dividends have been declared since 2015. FIVE’s shareholders’ equity before dividend declarations is as follows:10% Preference share capital, P200 par 2,000,000 Ordinary share capital, P100 par 8,000,000 Retained earnings 5,000,000 Total 15,000,000.If preference shares are cumulative and fully participating, how much is the amount of dividends to be received by ordinary shareholders?
FIVE CORP. declared P1,800,000 cash dividends to its preference and ordinary shareholders out of its profits in 2018. No dividends have been declared since 2015. FIVE’s shareholders’ equity before dividend declarations is as follows:10% Preference share capital, P200 par 2,000,000 Ordinary share capital, P100 par 8,000,000 Retained earnings 5,000,000 Total 15,000,000.If preference shares are cumulative and fully participating, how much is the amount of dividends to be received by ordinary shareholders?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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2. FIVE CORP. declared P1,800,000 cash dividends to its preference and ordinary shareholders out of its profits in 2018. No dividends have been declared since 2015. FIVE’s shareholders’ equity before dividend declarations is as follows:10%
Transcribed Image Text:The shareholders' equity section of BENTE COMPANY's statement of financial position as
of December 31, 2017, is as follows:
Ordinary shares, P10 par value
Share premium
Accumulated profits
Total
P4,800,000
400,000
6,600,000
P11,500,000
The following transactions happened chronologically during 2018:
a)
10,000 shares of authorized and unissued ordinary shares were sold P11 per
share, The company incurred share issue cost at P15,000.
Reacquired 10,000 shares as treasury shares at P15 per share.
The company issued additional 20,000 ordinary shares and 10,000 preference
b)
c)
shares with a par value of P15 in
exchange of a piece of equipment having a market value at the time of P1,000,000.
The ordinary shares were currently selling on this date at P25 per share.
The preference shares are convertible to ordinary shares at the rate of 1
d)
preference share to 3 ordinary shares.
5,000 of the preference shares were converted during that time.
e)
Reissued half of the treasury shares at P14 per share.
f)
The company declared PO.5 per ordinary share dividends to be settled on February
1, 2019.
Net income for the year is P437,000
g)
What is the amount of ordinary share premium as of December 31, 2018?
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