FINANCIAL ACCOUNTING AND REPORTING. i Manila VALIX/SIY/VALILW/ESCALA/SANTOS/DELA CRUZ An entity provided the following equity balances at year-end: 10% preference share capital, 30,000 shares, par P100 3,000,000 Ordinary share capital, 50,000 shares, par P100 5,000,000 Share premium 1,000,000 Retained earnings 2,000,000 ‘The preference shares have a call price of 120, a liquidation price of 115 and dividends have not been Paid for 3 years, What is the book value per preference share? She < She Buel = a ye Pam eect b. 130 ref tnidend Say (AM ¥IOT) 7 quam renin ce. 145 Uiqucen Prom dime (15- Wi) He saret PIM fs. < a, Jno-com aD Pam st porary [noah “eat saves $125 An entity provided the following shareholders’ equity at year-end: 10% cumulative preference share capital, P100 par, 30,000 shares 3,000,000 Ordinary share capital, P100 par value, 50,000 shares 5,000,000 Retained earnings 4,000,000 _ Am) foil Ce Dividends in arrears on the preference shares are for 5 years. If the entity were to be liquidated, the preference share would receive par plus a premium of P300,000, What is the book value per ordinary share? ‘Tolal site, 712 0 aay f b. 134 1 Camm) . 174 nek Dindends (ism) (amy to7 x5 4) ear Liawiaabon rome (rOyoHv’) An entity provided the following shareholders’ equity at year-end: Ordinary share capital, P100 par, 72,000 shares 7,200,000 Subscribed ordinary share capital, 12,000 shares 1,200,000 Subscription receivable notdeductea fr purpores of Computing BPS 400,000 gre Treasury shares, 4,000 at cost (600,000) Retained earings 2,000,000 What is the book value per ordinary share? on 4. 130.00 On December 31, 2020 and 2019, an entity had 30,000 10% cumulative preference shares of P100 par value outstanding. No dividends were in arrears on December 31, 2018. The entity did not declare a dividend during 2019. During 2020, the entity paid a cash dividend of P200,000 on the preference shares. How should the dividend in arrears on*preference shares be r _ eported in the 2020 financial statements? Pein aq “oan a. Accrued liability of P300,000 toe an, b. Disclosure of P300,000 om ©, Accrued liability of P400,000 om (avn 4. Disclosure of P400,000 + 6767rae ¢ 5. Anentity began operations January 1, 2016 and reported the following net income or loss for five years of operations: 1,500,000 loss 2016 2017 1,300,000 loss 2018 1,200,000 loss 2019 4,500,000 income 2020 9,000,000 income ‘On December 31, 2020, the capital accounts were: Y4.5n)In Preference share capital, P100 par, 12% participating and cumulative, 100,000 shares 10,000,000 Preference share capital, P100 par, 10% nonparticipating, 5,000,000 noncumulative, 50,000 shares Ordinary share capital, P10 par, 1,000,000 shares 10,000,000 ‘The entity has never paid cash or share dividend. The capital accounts have not changed since the entity began operations. Ifthe maximum amount available for cash dividend is declared on December 31, 2020, what amount of dividend is payable to ee Dwiderds gfe eee _ Oe 1. 12% Preference shareholders? aay refered prado (6,000) Gathon 124. os madera (120400) ae 4. 1,200,000 Wf. Peidend a 1M Pho INA 2. 10% Preference shareholders? We qn a. 2,500,000 | b. 2,860,000 ‘ d. 860,000 3. Ordinary shareholders? b DMOwerHOR cnitnion Share Renium eos wi-rampinaton | HS cevinson Re 4 en Gaeae “Icha ~ rue 2 | OFecapathon < ede pau (Sar at) ©. 1,920,000 ae Smee —., d. 4,500,000 voehat waiter Ly alee ‘took dra ‘ote pean eagatnagon — Recanalatoes e 6. "Adverse financial and operating circumstances warrant that an entity should undergo a quasi- reorganization at year-end. 1 * Inventory with a fair value of P1,000,000 is currently recorded in the accounts at cost of P1,500,000. ieimy “Svan 2 * Plant assets with a fair value of P3,000,000 are currently recorded at P4,000,000 net of accumulated depreciation, * »,'",, . * Unrecorded accounts payable amount to P300,000. FF par payne "oe * Individual shareholders contribute P1,500,000 to create additional paid-in Cepital canon. . No new shares are issued to the shareholders. remem 80.00 to facilitate the reorgani: 5 * ‘The par value of the share capital is reduced from P100 to P50. Sm, oe + Immediately before these events, the entity reported the following shareholders’ equity : Share capital, P100 par value, 50,000 shares 5,000,000 Share premium 500,000 Retained earnings (deficit) (2,000,000) it ization, what is the total shareholders” equity? After the quasi-reorgani: es vt 19 ae se a a mm tg. mth tM Cham) b. 2,500,000 call 1M (nm) ©. 1,700,000 9 4. 100,000 = Lm 767CPA REVIEW SCHOOL FOF THE PHILIPPINES Manila FINANCIAL ACCOUNTING AND REPORTING VALIX. SIY VALIX ESCALA SANTOS DELA CRUZ 1. An entity had the following share capital during 2020: Preference share capital, P100 par, 10% cumulative, 30,000 shares 3000 008 Ordinary share capital, P50 par, 100,000 shares 5008g The entity reported net income of P5,000,000 for the current year. There are no preference dividends in arrears on December 31, 2018. The entity paid no preference dividends during 2019 and paid 500,000 in preference dividends during 2020. What amount should be reported as basic earings, per share for 2020? umaadve =" cy dundond i ? Pref blends < nenuymuative — deduct chia a jm cane ‘loctin b. 50 fs «45 “tH 1 Rett a Cac) oe, ria ieae oa a eee An entity had 100,000 ordinary shares issued and outstanding at the beginning of current year. During the current year, the entity revealed the following ordinary share transactions: April 1 Issued 30,000 previously unissued shares May 1 Split the share 2 for 1 June 30 Purchased 10,000 shares for the treasury july 31 Distributed a 20 percent bonus issue December 31 Split the stock 3 for 1 ‘What is the weighted average number of shares for EPS purposes? a. 288,000 if mre axianes = ‘1209 »., 864,000 AI) ou X2X1-26Y9 XM n= NM ©. 882,000 Gian (oem) ¥12043 X= (Ian) 4. 972,000 shar 3. On Jamuary 1, 2020, an entity had 60,000 ordinary shares outstanding, P100 par, or a total par value of P6,000,000. During 2020, the entity issued rights to acquire one ordinary share at P100 in the ratio of one share for every 5 shares held. The rights are exercised on March 31, 2020. The market value of each share immediately prior to March 31, 2020 was P160. The net income for 2020 was P5,000,000. What amount shouldbe reported as basic earnings per share for 2020? lo a3 : 0 a saa a ’ we op z ue Thane + isp NW e746 POA UJh Goan x Resp X7In = leon ; ay _ltan “Bes x 4h > sath 4, Tham iaret ._ An entity provided the following extract from the statement of comprehensive income for the current year? Income before tax 6,000,000 Income tax expense 1,800,000) The entity paid during the year an ordinary dividend of P1,000,000 and a dividend on the redeernable preference shares of P500,000. The entity md 200,000 of PS par value ordinary shares in issue throughout the year and 500,000 authorized ordinary shares. What amount should be reported as basic earnings per share for the year? a. 30.00 fan “ny b, 27.50 mm = 0: d. 18.50 A76RPage 2 om x10- 5. On January 1, 2020, an entity had 200,000 ordinary shares and 100,000 10% P100 par value cumulative preference shares outstanding. No dividends were declared on either the preference or ordinary shares in 2020. On March 1, 2021, prior to the issuance of the financial statements for 2020, the entity declared a 100% share dividend on ordinary shares. Net income for 2020 was P7,500,000. What amount should be reported as basic earnings per share? 4 Myo sae ewes Than Ww ag + Arvin (anan x10f)Srare chen . 37.50 bases” 4 7 ae eS 40m 400. uistonding chares d. 6. An entity reported net income of P15,000,000 for the current year. The net income reflected an income tax rate of 30%. The net income included a casualty loss P5,000,000 before income tax. The entity showed the following shareholders’ equity at year-end: Uri effect Preference share capital 10% cumulative, P50 par value, 100,000 shares 5,000,000 Ordinary share capital, P100 par value, 300,000 shares issued_ 30,000,000 Share premium 10,000,000 Retained earnings 18,000,000 Treasury ordinary shares, 50,000 at cost 4,000,000 What amount should be reported as basic earnings per share? (Saman - 1. ¥ Aan, OF sued b. 60.00 Sa + 18 (sum) Tear stares c. 73.60 . JAN cuttonding 05 d. 48.33 7. An entity had one class of ordinary share capital outstanding and no other securities that are potentially convertible into ordinary shares. The net income for 2021 was P6,000,000 and the net income for 2020 was P3,600,000. During 2020, 120,000 shares were outstanding. In 2021, two distributions of additional ordinary shares occurred: April 1 - 40,000 treasury shares were sold. July 1 - A2 for 1 share split was issued. 1. What amount should be reported as basic earnings per share for 2021 in the comparative income statement for 2021? # thy omy x2%%m = Aon a. 25.00 oh on = $20 4) 40m X 2x4 om _ bi 7, 900 anh c. 18.75 d. 37.50 2. What amount should be reported as basic earnings per share for 2020 in the comparative income statement for 2021? Bs ym 2Y%In = fond a. 30.00 91 | 4 b./ 15.00) ‘Aoi * c. 45.00 d. 22.50 END 6768Manila FINANCIAL ACCOUNTING AND REPORTING —_ VALIX/SIY/VALIX/ESCALA/SANTOS/DELA CRUZ 1. Anentity had 200,000 PSO par value ordinary shares outstanding on January 1, 2020. In addition, on January 1, 2020, the entity had issued 30,000 convertible cumulative 10% preference shares with P100 par. These preference shares were converted on September 1, 2020. ones aae Each preference share was converted into 5 ordinary shares. The preference dividends for the entire year were paid in full before the conversion, The entity had no other potentially dilutive securities. Net income for the current year was P5,000,000.. 1 What amount should be reported as basic earnings per share? a. (18809 Ymm-29.m “I! 2M xP} = 29m ited set inome__// mere rs ’. ie a 2aims AF am xs EP an 00 J bana bo) 4m Xn = SAN ©. (24 250,00) d. 15.00 2. Whats the amount of diluted earnings per share? i “15.66 sm ox y= 22. ; b 1375 ee anym_(sm x40) ai? 7 c. 13.44 m 4. 15.94 3. An entity had 200,000 ordinary shares issued and outstanding on January 1, 2020. ‘Unexercised share options to purchase 50,000 ordinary shares at P20 per share were outstanding at the beginning and end of 2020. ‘The average market price of ordinary share was P25 during 2020. Net income for the year was 5,000,000. 1. What amount should be reported as basic ei ings per share? a Sian b. 50.00 aoe ©. 12.50 4. 30.00 2. What amount should be reported as diluted earnings per share? x dan aan (aan) (srao fas x20) 20.0 6769ge ee Aer se pt uaa ~ Abie -Civerfitte PC = Inerbental Er < BERT icekee Page 2 4, An entity reported the following information on December 31, 2020: Ordinary share capital 110,000 shares Convertible noncumulative preference share capital 20,000 shares. 10% convertible bonds payable 2,000,000 Get oqcis- Share options to purchase 60,000 shares at P15 were outstanding. Market price of ordinary share was 4540 "60", P25 on December 31, 2020 and averaged P20 during the year. No value was assigned to the share ‘5M joyenai options. The entity paid preference dividends of PS per share. The preference shares are convertible © into 40,000 ordinary shares. The 10% bonds are convertible into 30,000 ordinary shares. The net income for 2020 is P650,000, The tax rate is 30%, (94M ~ (soa x) =ssyn 1. What amount should be reported as basie earnings per share for 2020? inom wet a. (810007 tani ae? b. 591 en a i ©. 4.36 Crore ops —— d. 4.40 pees (asim 4 da. 6 ae 2. What is the total number of potential ordinary shares? tem ATO a 130,000 bm ere atone b Ans000 am mm Rm FOS : soo ©. | 85,000") er anhalt Teens 4. 70,000 Eh penial iden (20an3E)>_ ITD inde (amo) 3. What amount shouldbe reported as diluted earnings per share for 2020? cy ep a. 5.00 ‘com. PC (itnen fon) = 2.50 ». 440 toi am [n> $4 4 5. An entity has outstanding 20,000 written put options on ordinary shares with an exercise price of 350. The average market price of ordinary shares for the period is P280. In calculating diluted ‘earnings per share, how many incremental ordinary shares should be included as a result of the written put options? eam X96 > FMM Jas)» 35M, Dab Manet a. 20,000 ‘abe repeal (20 ma > Phu b. 25,000 aa. Srlema os 5,000 = Ince in Des deg ae 6. An entity reported a net loss of P3,000,000 for the current year. The enti share capi outstanding as follows: ee sos ‘Ordinary share capital, P100 par, 50,000 shares 5,000,000 Preference share capital, P100 par, 10% cumulative, two years in arrears, ee 20,000 shares convertible into 20,000 ordinary shares 2,000,000 1, What is the basie loss per share? (ama) =e fi 6769