27. An entity provided the following equity balances at year-end:10% preference share capital, 30,000 shares, par P100Ordinary share capital, 50,000 shares, par 100Share premiumRetained earnings3,000,0005,000,0001,000,0002,000,000The preference shares have a call price of120, a liquidation price of 115 and dividends have not been paid for 3 years.What is the book value per preference share?a. 125b. 130с. 145d. 110

Book value per preference = Call price or Par preference value + Arrears of preference dividend /…

Answered: entity provided ing equity balance 10%…

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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Problem #2 Share Dividends Assume the following data: Ordinary Shares, P100 par value, 50,000 shares issued P5,000,000 Share Premium 200,000 2,000,000 Retained Earnings Market Value-declaration date 150 Market Value-distribution date 170 Required: For each of the following assumptions, prepare entries on the date of declaration and date of рayment: 1. A 20% share dividends is declared on ordinary shares. 2. A 10% share dividends is declared on ordinary shares.
a. P125 b. P133 c. P141 d. P191 e. answer not given
QUESTION 2Naruto Bakery has a capital structure consisting of:42,000 issued and paid-up ordinary shares RM105,0005,000 issued and paid-up 10% Preference shares RM15,0008% Bonds (10-year maturity) RM30,000The balance of retained earning as at 1 January 2021 was RM75,000. The market priceper unit of the company’s financial instruments are as follows:Ordinary shares : RM2.50 (last dividend paid was RM0.50; growth rate is 5%Preference shares : RM3.008% Bonds : RM890.00 (par value RM1,000)The company is considering to invest in new project worth RM80,000. The floatationcost to sell more shares and bonds are 5%. The corporate tax rate 25%.You are required to calculate (show all workings):b. The company’s cost of debt, preference share, retained earnings and newissuance of ordinary shares.
QUESTION TWO B plc has the following capital structure: K’000Ordinary shares – K0.40 5,000 Retained earnings 500 10% Preference shares at K1 1,500 10% K100 redeemable debentures 3,000 Total funds employed 10,000 The market price of the preference shares is 80n ex-div, the ordinary shares are quoted at K1.62 cum-div per share. Debenture stock is quoted at K97.5 ex-interest per K100 nominal and will be redeemable at par in exactly 7 years’ time. B plc has just declared dividend of K1,500,000 in total for all issued ordinary shares. The dividend growth rate is 4% per year forever. Company tax is 30% per year. The market rate of return is 12% and the company has an equity beta value of 1.25 Required:a) Calculate WACC based on market values. b) Discuss the implications of using a wrong WACC value in project appraisal and comment on the current level of capital gearing.
Compute the book value per 8% preference share
Year 2 Year 1 Preference share, par value P50, 10%. Ordinary share, par value P20. Share premium - ordinary share.. Retained earnings... P100,000 400,000 P100,000 400,000 100,000 100,000 140,000 120,000 Net income 60,000 10,000 80,000 Dividends on preference share Dividends on ordinary share Market price per share, Dec 31. 10,000 50,000 40,000 28.00 21.00 Instruction: Determine the following A. Price-earnings ratio B. Dividend yield ratio C. Payout ratio D. Return of Equity E. Book value per share
At Dec.31,2020 X company has following Balances #of Shares Share Capital of OS $500,000 at par value of $10per share 50,000 Share Capital of PS $100,000 at par value $100 per share 1000 Retained Earning$200,000 PS has a right in 5% interest not cumulative and not participating compute Book Value (BV) per share
8
What are the adjusting entry in this problem?

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