On January 1, 2020, ABC Company reported the following shareholders’ equity Share capital, 250,000 shares authorized, 100,000 shares outstanding 5,000,000 Share premium 4,000,000 Retained earnings 5,000,000 The board of directors declared a 10% stock dividend on July 1, 2020, when the market value of the share was P100. The share dividend was issued on October 1, 2020 when the market value of the share was P120. The share has a par value of P50. The entity sustained a net loss of P2,500,000 for 2020. What amount should be reported as retained earnings on December 31, 2020?
On January 1, 2020, ABC Company reported the following shareholders’ equity Share capital, 250,000 shares authorized, 100,000 shares outstanding 5,000,000 Share premium 4,000,000 Retained earnings 5,000,000 The board of directors declared a 10% stock dividend on July 1, 2020, when the market value of the share was P100. The share dividend was issued on October 1, 2020 when the market value of the share was P120. The share has a par value of P50. The entity sustained a net loss of P2,500,000 for 2020. What amount should be reported as retained earnings on December 31, 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2020, ABC Company reported the following shareholders’ equity
|
Share capital, 250,000 shares authorized, 100,000 shares outstanding |
5,000,000 |
|
Share premium |
4,000,000 |
|
|
5,000,000 |
The board of directors declared a 10% stock dividend on July 1, 2020, when the market value of the share was P100. The share dividend was issued on October 1, 2020 when the market value of the share was P120. The share has a par value of P50. The entity sustained a net loss of P2,500,000 for 2020. What amount should be reported as retained earnings on December 31, 2020?
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