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Icon Company provided the following balances at the end of the current year: Wasting asset, at cost Accumulated depletion 20,000,000 2,500,000 50,000,000 Share capital Capital liquidated Retained earnings 1,800,000 1,500,000 1,000,000 Depletion based on 50,000 units at P20 per unit Inventory of resource deposit (5,000 units) 400,000 Required: a. Compute the maximum dividend that can be declared. b. Prepare journal entry to record the declaration of P2,000,000 dividend.

Icon Company provided the following balances at the end of the current year: Wasting asset, at cost Accumulated depletion 20,000,000 2,500,000 50,000,000 Share capital Capital liquidated Retained earnings 1,800,000 1,500,000 1,000,000 Depletion based on 50,000 units at P20 per unit Inventory of resource deposit (5,000 units) 400,000 Required: a. Compute the maximum dividend that can be declared. b. Prepare journal entry to record the declaration of P2,000,000 dividend.

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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Icon Company provided the following balances at the end of the current year: Wasting asset, at cost Accumulated depletion 20,000,000 2,500,000 50,000,000 Share capital Capital liquidated 1,800,000 Retained earnings 1,500,000 1,000,000 Depletion based on 50,000 units at P20 per unit Inventory of resource deposit (5,000 units) 400,000 Required: a. Compute the maximum dividend that can be declared. b. Prepare journal entry to record the declaration of P2,000,000 dividend.
Transcribed Image Text:Icon Company provided the following balances at the end of the current year: Wasting asset, at cost Accumulated depletion 20,000,000 2,500,000 50,000,000 Share capital Capital liquidated 1,800,000 Retained earnings 1,500,000 1,000,000 Depletion based on 50,000 units at P20 per unit Inventory of resource deposit (5,000 units) 400,000 Required: a. Compute the maximum dividend that can be declared. b. Prepare journal entry to record the declaration of P2,000,000 dividend.
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