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What is the adjusted balance of the company’s Accumulated profit account at the end of year?

What is the adjusted balance of the company’s Accumulated profit account at the end of year?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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11. What is the adjusted balance of the company’s Accumulated profit account at the end of year? 

11. What is the adjusted balance of the company's Accumulated profit account at the end of year? Nevada Square has the following selected accounts in its shareholders' equity section as of December 31, 2017: Preference shares, P100 par, 10 percent cumulative, 100,000 shares issued and outstanding Ordinary shares, P20 par, 1,000,000 shares authorized, 700,000 shares issued and outstanding P10,000,000 Share premium Accumulated profits 18,000,000 8,000,000 30,000,000 There are no dividends in arrears on the preference shares. During 2018, the following transactions occurred: a. The board of directors declared a cash dividend totaling to P2,800,000 to be paid to preference and ordinary shareholders. Later, a share dividend of 100,000 ordinary shares were declared on ordinary shares. The market value of ordinary shares is P68 per share on the date the share dividends were declared. b. Sometime after the above dividends were declared and settled, the board of directors declared as property dividends one shares of its investment in Bingo Corp. stocks being held by the company as trading securities for every two ordinary share outstanding. Bingo Corp. stocks were originally purchased by the company at P12 per share and have a carrying value based on their fair value as per the last remeasurement (balance sheet) date, at P20 per share. Bingo Corp. shares were selling at P24 when the property dividends were declared and were selling at P25 when the property dividends were settled. The company had a total of 500,000 shares of Bingo Corp. shares. c. At the end of 2018, the board declares a four-for-one share split. With the split, the number of ordinary shares authorized to be issued increased to 4,000,000. At the date of the share split, the market value of ordinary share is P75 per share. d. Net earnings during 2018 total P6,000,000.
Transcribed Image Text:11. What is the adjusted balance of the company's Accumulated profit account at the end of year? Nevada Square has the following selected accounts in its shareholders' equity section as of December 31, 2017: Preference shares, P100 par, 10 percent cumulative, 100,000 shares issued and outstanding Ordinary shares, P20 par, 1,000,000 shares authorized, 700,000 shares issued and outstanding P10,000,000 Share premium Accumulated profits 18,000,000 8,000,000 30,000,000 There are no dividends in arrears on the preference shares. During 2018, the following transactions occurred: a. The board of directors declared a cash dividend totaling to P2,800,000 to be paid to preference and ordinary shareholders. Later, a share dividend of 100,000 ordinary shares were declared on ordinary shares. The market value of ordinary shares is P68 per share on the date the share dividends were declared. b. Sometime after the above dividends were declared and settled, the board of directors declared as property dividends one shares of its investment in Bingo Corp. stocks being held by the company as trading securities for every two ordinary share outstanding. Bingo Corp. stocks were originally purchased by the company at P12 per share and have a carrying value based on their fair value as per the last remeasurement (balance sheet) date, at P20 per share. Bingo Corp. shares were selling at P24 when the property dividends were declared and were selling at P25 when the property dividends were settled. The company had a total of 500,000 shares of Bingo Corp. shares. c. At the end of 2018, the board declares a four-for-one share split. With the split, the number of ordinary shares authorized to be issued increased to 4,000,000. At the date of the share split, the market value of ordinary share is P75 per share. d. Net earnings during 2018 total P6,000,000.
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