The following information pertains to Imperial Corp.No dividend declaration or payment for 3 years on its 2,000 shares of 6%, P30 par value cumulative preference shares.Gain on disposal of Imperial’s Cebu Division of P90,000.Treasury shares costing P100,000 reissued for P30,000.What amount of retained earnings should be restricted as a result of these items?P 0P10,000P90,000P70,000

The restricted retained earnings are the earnings which are not available for distribution as…

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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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The following information pertains to Imperial Corp.

No dividend declaration or payment for 3 years on its 2,000 shares of 6%, P30 par value cumulative preference shares.
Gain on disposal of Imperial’s Cebu Division of P90,000.
Treasury shares costing P100,000 reissued for P30,000.

What amount of retained earnings should be restricted as a result of these items?

P 0

P10,000

P90,000

P70,000

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