Problem #10 Share Dividends and Share Splits On Jan. 1, 2019, the records of Matuguinas Corporation showed the following balances: Ordinary Shares, P1 par Share Premium-Ordinary Retained Earnings P 80,000 920,000 760,000 On Jan. 15, 2019, the board of directors declared a 3% share dividend; the stock's market price was P50 per share, On Nov. 4, 2019, the board of directors declared a for-1 share split; the stock's market price was P90 per share. Required: 1. How many shares of stock were outstanding on Jan. 1, Mar. 31, and Dec. 31 2016 assuming no other events related to shareholders' equity occurred? 2. What effect did the share dividends have on total shareholders' equity? 3. Prepare the entries for these two events. 4. Why would a corporation declare a share split? 5. What would the second entry have been if the corporation had declared a 100% share dividend instead of a 2-for-1 share split?

Problem #10 Share Dividends and Share Splits On Jan. 1, 2019, the records of Matuguinas Corporation showed the following balances: Ordinary Shares, P1 par Share Premium-Ordinary Retained Earnings P 80,000 920,000 760,000 On Jan. 15, 2019, the board of directors declared a 3% share dividend; the stock's market price was P50 per share, On Nov. 4, 2019, the board of directors declared a for-1 share split; the stock's market price was P90 per share. Required: 1. How many shares of stock were outstanding on Jan. 1, Mar. 31, and Dec. 31 2016 assuming no other events related to shareholders' equity occurred? 2. What effect did the share dividends have on total shareholders' equity? 3. Prepare the entries for these two events. 4. Why would a corporation declare a share split? 5. What would the second entry have been if the corporation had declared a 100% share dividend instead of a 2-for-1 share split?

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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