prepare a statement of changes in equity for the year ended December 31, 2019.

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 19P: Anoka Company reported the following selected items in the shareholders equity section of its...
icon
Related questions
Question

Philippine Accounting Standard

The following transactions were taken from the records of Marimar Company for you 
to prepare a statement of changes in equity for the year ended December 31, 2019. After 
preparing the statement of changes in equity, provide a paragraph explaining the importance 
of providing this information to the varied users of financial statements. 
On January 1, 2019, Marimar company had 3,000,000 authorized ordinary shares of 
P5 par, of which 1,000,000 shares were issued and outstanding on that date. Account 
balances appear for the shareholders’ equity items of Marimar company on January 1, 2019:
Ordinary share capital 5,000,000
Share Premium 3,750,000
Retained Earnings 1,625,000
The following transactions transpired during the year:
January 6 Iissued at P54 per share, 50,000 shares of P50 par, 9% cumulative, convertible 
preference share capital. Marimar had 125,000 authorized preference shares. 
Feb. 3 Reacquired 10,000 ordianry shares for P16 per share. Marimar uses the cost 
method.
April 30 Ccompleted an additional public offering of 250,000 ordinary shares with P5 
par value. The shares were sold to the public at P12 per share.
June 20 Declared a cash dividend of P1 per ordinary share, payable on July 10 to 
shareholders of record on July 1. 
Nov. 6 Sold 10,000 shares of treasury for P21 per share.

Dec. 7 Declared yearly cash dividend on preference share, payable on January 7, 
2020, to shareholders of record on December 31, 2019.
2020
Jan. 17 Before the books for 2019 were closed, Marimar became aware that the ending 
inventory on December 31, 2018 was overstated by P100,000. The after tax 
effect on 2018 net income was P70,000. The appropriate correcting entry was 
recorded. After correction of the beginning inventory, net income for 2019 was 
P1,125,000. 

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Financial Reporting in Hyperinflationary Economies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning