FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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JKL Corp. reported the following amounts in the shareholders' equity section of its December 31, 2015, statement of financial position:
Ordinary shares, P5 par (50,000 shares authorized, 20,000 shares issued) 100,000
Share premium – Ordinary shares 192,000
The following transactions occurred during 2016:
- At the beginning of 2016, the company paid the annual 2015 P1 per share dividend on preference shares and PO.50 per share dividend on ordinary shares. These dividends had been declared on December 1, 2015.Further investigations revealed that no entry has been made to account for the declaration of the said dividends.
- On February 13, the company purchased 4,000 shares of its own outstanding ordinary shares for P80,000.
- On March 30, the company declared and issued ordinary shares split-up (1 is to 2).
- On June 19, the company reissued 2,800 treasury shares for an equipment with a fair value at P50,000.
- On August 1, the company issued 10,000 shares of preference shares at P15 per share.
- On September 30, the company declared a 10% stock dividend on the outstanding ordinary shares when the stock is selling for P6 per share. The share dividends were subsequently issued on October 11.
- December 1, the company declared the annual 2016 P1 dividend on preference shares and the PO.25 per share dividend on ordinary shares. These dividends are payable at the beginning of 2017.
- The company registered a net income for 2016 at P940,000.
Requirements:
- What is the effect to
stockholders' equity as a result of the share split in item c? - What is the amount debited to accumulated profits as a result of the declaration of the 10% stock dividend in item f?
3. What is the amount debited to accumulated profits as a result of the 2016 cash dividend declaration?
4. What is the correct balance of the accumulated profits-unappropriated account as of December 31, 2016?
5. Assuming that the share dividends declared in item f was 20%, what is the amount debited to retained earnings as a result of the declaration of stock dividends?
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