The shareholders' equity of Kendrick Corp. on August 31, 2019, shows the following accounts and balances:P 2,000,0008% Preference share capital, P20 parOrdinary share capital, P10 parShare premiumRetained earningsTreasury shares (50,000 ordinary shares, at cost)8,500,00012,000,00010,000,000(1,000,000)The preference shares are cumulative and participating. Dividends were last declared and paid in 2015. On thisdate, Kendrick declared the maximum amount of cash dividends that it can declare.How much of the total dividends will be allocated to the preference shares?How much will be allocated to each ordinary share?

From the profits and retained earnings, Preference shares are paid and the remaining amount is…

Answered: The shareholders' equity of Kendrick…

The shareholders' equity of Kendrick Corp. on August 31, 20 8% Preference share capital, P20 par Ordinary share capital, P10 par Share premium Retained earnings Treasury shares (50,000 ordinary shar

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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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

100%

The shareholders' equity of Kendrick Corp. on August 31, 2019, shows the following accounts and balances:
P 2,000,000
8% Preference share capital, P20 par
Ordinary share capital, P10 par
Share premium
Retained earnings
Treasury shares (50,000 ordinary shares, at cost)
8,500,000
12,000,000
10,000,000
(1,000,000)
The preference shares are cumulative and participating. Dividends were last declared and paid in 2015. On this
date, Kendrick declared the maximum amount of cash dividends that it can declare.
How much of the total dividends will be allocated to the preference shares?
How much will be allocated to each ordinary share?

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