EXERCISES

A. For the last three years, Squarepants Corporation paid the following cash dividends:
2016 – P 250,000; 2017 – P 350,000; 2018 – P 650,000
During the last three years, capital accounts show the following number of shares outstanding:
12% Preference Shares, P 100 par 10,000 shares
Ordinary Shares, P 10 par 50,000 shares

Dividends are in arrears for two years at the beginning of 2016.

Required: Compute the amount of dividends that will be paid in total and per share on preference shares and
ordinary shares for each year under the following independent assumptions:
1. Preference shares are non-cumulative and non-participating
2. Preference shares are cumulative and non-participating
3. Preference shares are non-cumulative but participating
4. Preference shares are cumulative and participating
5. Preference shares are non-cumulative and but participating up to 6%.

NOTE: To compute dividends per share = Total dividends/number of shares issued and outstanding

B. The adjusted trial balance of Miami Heat Corporation on December 31, 2018 includes the following account
balances:
Cash Dividends payable P 40,000
Income Tax Payable 25,000
Ordinary Share Capital,P 20 par value, 200,000 shares authorized 2,400,000
Ordinary Shares Subscribed, 80,000
Ordinary Share Premium 240,000
10% Preference Share Capital, 25,000 shares authorized, 12,000 shares outstanding 1,200,000
Preference Share Premium 120,000
Retained Earnings Appropriated for Contingencies 150,000
Retained Earnings Appropriated for Plant Expansion 100,000
Retained Earnings-Unappropriated 400,000
Ordinary Share Dividend Distributable 350,000
Paid in Capital from Share Dividends 130,000
Pre-operating Costs 25,000

Required:
1) OSC issued and outstanding shares
2) OSC subscribed shares
3) PSC Par Value per share
4) Total share capital
5) Total APIC
6) Total Paid In Capital
7) Legal Capital
8) Unappropriated Retained Earnings
9) Total Retained Earnings
10) Assuming the cancellation of the RE Appropriated for Plant Expansion, how much will be the Total RE?
11) Given the above data, how much is the total liabilities?
12) Prepare the Shareholders’ Equity section as it would appear on the Statement of Financial Position
C. Anthor Corporation’s statement of financial position shows total shareholders’ equity of P 3,000,000 as of
December 31, 2018. Compute the book value per share of each class of share capital under each of the
following independent cases:

1. The corporation has only one share class of shares outstanding: 325,000 Ordinary shares with a par
value of P 25.
2. The corporation has two classes of shares outstanding: 15,000 shares of P 100 par value Preference
share capital with a liquidation value of P 120 per share and 125,000 shares of P 20 par ordinary share
capital.

D. The Drea Corporation has 200,000 ordinary shares authorized, P 20 par value. As of December 31, 2018,
60,000 shares are outstanding. Compute the earnings per share assuming the corporation has a profit of:
a. P 10,000 b. P 70,000 c. P 90,000 d. P 150,000 e. P 180,000

E. The shareholders' equity of Lorraine Corporation as of December 31, 2018 showed the following balances:
Ordinary Share Capital, P 15 par, 100,000 shares P 1,500,000
10% Preference Share Capital, P 25 par, 10,000 shares 250,000
Preference Share Premium 150,000
Ordinary Share Premium 200,000
Retained Earnings 200,000
Total Shareholders’ Equity P 2,300,000

Compute the book value per share on the preference and ordinary shares under each of the following
assumptions.
1. Preference shares have a liquidation value of P 30 per share; there are no dividends on arrears.
2. The preference shares are cumulative with dividends in arrears for 5 years (including the current
year). Upon corporation liquidation, shares are preferred to assets up to par.
3. Using data in no. 1, compute the earnings per share assuming that the profit of the corporation is
a. P 20,000 b. P 75,000 c. P 120,000 d. P 300,000

F. The Jomel Corporation has the following information relating to its share capital

10% Preference Shares, cumulative, P 100 par value,

Ordinary Shares, P 10 par value, 500,000 shares authorized,

Compute the earnings per share assuming that the corporation reported a profit of P 750,000 as of December
31, 2018.