Watusi Inc. began operations in January 2021 and reported the following results for each of its 3 years of operations. P260,000 net loss P40,000 net loss P700,000 net income 2021 2022 2023 At December 31, 2023, Watusi Inc. share capital accounts were as follows. Share Capital-Preference, 6% cumulative, par value P100; authorized, issued, and outstanding 5,000 shares Share Capital-Ordinary, par value P1.00; authorized 1,000,000 shares; issued and outstanding 750,000 shares P260,000 750,000 Watusi Inc. has never paid a cash or share dividend. There has been no change in the share capital accounts since Watusi began operations. The country law permits dividends only from retained earnings. Instructions a. Compute the book value of the ordinary shares at December 31, 2023. b. Compute the book value of the ordinary shares at December 31, 2023, assuming that the preference shares have a liquidating value of P106 per share.

Watusi Inc. began operations in January 2021 and reported the following results for each of its 3 years of operations. P260,000 net loss P40,000 net loss P700,000 net income 2021 2022 2023 At December 31, 2023, Watusi Inc. share capital accounts were as follows. Share Capital-Preference, 6% cumulative, par value P100; authorized, issued, and outstanding 5,000 shares Share Capital-Ordinary, par value P1.00; authorized 1,000,000 shares; issued and outstanding 750,000 shares P260,000 750,000 Watusi Inc. has never paid a cash or share dividend. There has been no change in the share capital accounts since Watusi began operations. The country law permits dividends only from retained earnings. Instructions a. Compute the book value of the ordinary shares at December 31, 2023. b. Compute the book value of the ordinary shares at December 31, 2023, assuming that the preference shares have a liquidating value of P106 per share.

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 Financial controller at Think Inc. is currently preparing the calculation for earnings per share and the related disclosure for the firm's financial statements. The following information has been extracted from the firm's financial statements for the fiscal year ended June 30, 2021. * Share capital - preference, 6% cumulative, $50 par value, 100,000 shares authorized, 25,000 shared issued and outstanding $1,250,000 * Share capital - ordinary, $1 par, 10,000 shares authorised, 1,000,000 shares issued outstanding $1,000,000 * Share premium - ordinary (includes any amounts for options and conversations) - $4,000,000 * Retained earnings - $6,000,000 * Notes payable, 10% - $1,000,000 * Convertible bonds payable - $5,000,000 * 10% bonds payable - $6,000,000 The following transactions have also occurred at Think. Options were granted on July 1, 2020, to purchase 200,000 shares at $15 per share. Although no options were exercised during the fiscal year 2021, the average price per ordinary…
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1. The balance sheet of Quetico Inc. reported the following at December 31, 2020: A Shareholders' Equity B C Preferred shares, $0.40, 10,000 shares authorized 2 and issued $ 100,000 3 Common shares, 100,000 shares authorized* 400,000 45 Accumulated other comprehensive income Retained earnings 224,000 476,500 6 Total shareholders' equity 7 $ 1,200,500 *The common shares were issued at a stated value of $8.00 per share. Requirements a. Are the preferred shares cumulative or non-cumulative? How can you tell? b. What is the total amount of the annual preferred dividend? c. How many common shares are outstanding? d. Compute the book value per share of the common shares. No preferred dividends are in arrears, and Quetico Inc. has not yet declared the 2020 dividend..
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