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much will be in arrears at the end of 2018?  ____________________ 7. How should the scrip divide

much will be in arrears at the end of 2018?  ____________________ 7. How should the scrip divide

FINANCIAL ACCOUNTING
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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6. How much will be in arrears at the end of 2018?  ____________________

7. How should the scrip dividend and related interest be recorded?

The shareholders' equity of Atlanta Hawks Inc., as of December 31, 2018 consists of 10% Preference Shares (cumulative and participating) with outstanding shares of 6,000, P 100 par value; Ordinary Shares of 10,000 with P 40 par value and Retained Earnings of P 800,000. Dividends were in arrears for 2 years at the start of 2018. Dividends declared for 2018 amounted 6. to P 200,000. How much will be in arrears at the end of 2018? Clippers Corporation had sufficient retained earnings in 2018 as a basis for dividends but was temporarily short of cash. The entity declared a dividend of P 1,000,000 on April 1, 2018, and issued promissory notes to the shareholders in lieu of cash. The notes, which were dated April 1, 2018, had a maturity date of March 31, 2019 and a 10% interest rate. How should the scrip 7. dividend and related interest be recorded?
Transcribed Image Text:The shareholders' equity of Atlanta Hawks Inc., as of December 31, 2018 consists of 10% Preference Shares (cumulative and participating) with outstanding shares of 6,000, P 100 par value; Ordinary Shares of 10,000 with P 40 par value and Retained Earnings of P 800,000. Dividends were in arrears for 2 years at the start of 2018. Dividends declared for 2018 amounted 6. to P 200,000. How much will be in arrears at the end of 2018? Clippers Corporation had sufficient retained earnings in 2018 as a basis for dividends but was temporarily short of cash. The entity declared a dividend of P 1,000,000 on April 1, 2018, and issued promissory notes to the shareholders in lieu of cash. The notes, which were dated April 1, 2018, had a maturity date of March 31, 2019 and a 10% interest rate. How should the scrip 7. dividend and related interest be recorded?
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