L-NU AA-23-02-01-18

LYCEUM-NORTHWESTERN UNIVERSITY
Tapuac District, Dagupan City

COLLEGE OF BUSINESS EDUCATION

MIDTERM EXAMINATION – ACCTG 4 Financial Accounting Theory and Practice Part 2

1st Semester, AY 2019– 2020
Prepared by: Amie Jane R. Miranda, CPA

Name:_____________________________________ Score:____________________

Student No.: _______________ Year/Section:___________ Date of Exam: ____________

I. MATCHING TYPE: Choose your answer from the column B and write it on the space provided in the
column A. Strictly “NO ERASURES”
A B
______1. Represents the cumulative profit which a. Unrestricted
are retained in the business and not yet distributed to b. Legal requirement
shareholders. c. Voluntary
______2. The portion of the retained earnings that is available d. Retained Earnings
for future distribution to the shareholders. e. Deficit
______3. Such as retained earnings appropriated for the f. Cash Dividends
cost of treasury shares reacquired and those transferred to g. Appropriated/ Restricted
statutory reserves. h. Contractual Requirement
______4. The portion of retained earnings that is not i. Capital Deficiency
available for distribution unless the restriction is j. Date of declaration
subsequently reversed. k. Property dividends
______5. Such as retained earnings appropriated in compliance l. Date of record
with loan agreements or bond indentures for the protection m. Share dividends
of creditors. n. Date of distribution
______6. Such as retained earnings appropriated for o. Noncumulative
probable contingencies, business expansion, and the like. p. Participating
______7. When the retained earnings account has a q. Nonparticipating
negative balance, it is described in the financial statements r. Cumulative
as _________. s. Ex-dividend date
______8. Dividends in the form of cash. t. Date of distribution
______9. When total shareholders’ equity has a negative balance,
it is described in the financial statements as _________.
______10. Dividends in the form of Non-cash assets.
______11. Dividends in the form of entity’s own shares.
______12. The date when the board of directors formally
announces the distribution of dividends.
______13. The date on which the stock and transfer book
of the corporation is closed for registration.
______14. The period prior to the date of record is referred
to as ________.
______15. The date when dividends declared are distributed
to the shareholders who are entitled to the dividends.
______16. Shares issued plus subscribed shares minus treasury
shares.
______17. Is one which the dividend entitlement for a year is
forfeited when dividends are not declared in that year.
______18. Is one which the dividends entitlement accumulates
each year until paid.
______19. Is one which is entitled to an amount in excess of the
fixed amount of dividends.
______20. Is one which is entitled only to a fixed amount of
dividends.

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II. Problem Solving: Show your solution and double rule your final answer.

21. On April 1, 20x1 the board of directors of ABC Co. declares 60 dividends per share to shareholders of
record as of April 15, 20x1 for distribution on May 1, 20x1. The shareholders’ equity of ABC as of April 1,
20x1 is as follows:
Share Capital, authorized capital 10,000 shares, 100 par 800,000
Subscribed share capital 220,000
Share premium 100,000
Retained earnings 454,000
Treasury shares (at cost of 120 per share) (144,000)
Other components of equity 70,000
Total shareholders’ equity 1,500,000

How much is the oustanding shares? (2 pts)

22. Cash dividends payable? (2 pts)

23. Provide the journal entries: (3 pts)

April 1, 20x1 (Date of
declaration)
April 15, 20x1 (Date
of record)
May 1, 20x1 (Date of
distribution)

24. On April 1, 20x1, the board of directors of ABC Co. declared 50% scrip dividends to shareholders of
record as of Arpil 15, 20x1 for distribution on Spetember 30, 20x1. The scrip dividends bear 10% interest
per annum. The shareholders’ equity of ABC as of April 1, 20x1 is as follows:

Share Capital, authorized capital 10,000 shares, 100 par 800,000

Subscribed share capital 220,000
Share premium 100,000
Retained earnings 454,000
Treasury shares (at cost of 120 per share) (144,000)
Other components of equity 70,000
Total shareholders’ equity 1,500,000

How much is Scrip dividends payable? (2 pts)

25. Provide the journal entries: (3 pts)

April 1, 20x1 (Date of
declaration)
April 15, 20x1 (Date
of record)
May 1, 20x1 (Date of
distribution)

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26. On April 1, 20x1, ABC Co. declared share dividends of “1 share for every 5 shares held” to
shareholders of record as of April 15, 20x1, for distribution on May 1, 20x1. The fairvalue per share on
declaration date is 140. ABC’s shareholders’ equity immediately before the dividend declaration is
shown below:

Share Capital, authorized capital 10,000 shares, 100 par 800,000

Subscribed share capital 220,000
Share premium 100,000
Retained earnings 524,000
Treasury shares (at cost of 120 per share) (144,000)
Total shareholders’ equity 1,500,000

How much is the Outstanding shares? (2 pts)

27. How much is the total share dividends distributable? (2 pts)

30. Provide the journal entries: (3 pts)

April 1, 20x1 (Date of
declaration)
April 15, 20x1 (Date
of record)
May 1, 20x1 (Date of
distribution)

ajmiranda
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Goodluck and Godbless

Reviewed and Checked by:

Dr. Genoveva Y. Reyes, CPA, FRIAcc

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Dean, College of Business Education

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