P.

226
Exercise #1
Jun 30 Retained Earnings 500 000
Cash Dividends Payable 500 000
Dec 01 Retained Earnings 250 000
Appropriation for Plant Expansion 250 000
Dec 31 Retained Earnings 80 000
Income Summary 80 000’
Balance of unrestricted retained earnings = P445 000
1 275 000 Balance – 80 000 Net loss = 1 195 000
1 195 000 – 750 000 (Retained Earnings) = 445 000
P.226
Exercise #2
a. Retained Earnings (5 000 000)(10%) 500 000
Cash Dividends Payable 500 000
Cash Dividends Payable 500 000

Cash 500 000

b. Retained Earnings(50 000sh)(5) 250 000

Cash Dividends Payable 250 000

Cash Dividends Payable 250 000
Cash 250 000
c. Retained Earnings (50 000sh)(15) 750 000
Merchandise Dividends Payable 750 000
Merchandise Dividends Payable 750 000
Merchandise Inventory 750 000
d.

e. Retained Earnings (50 000sh)(105)(22%) 1 155 000

Stock Dividends Payable 1 155 000

Stock Dividends Payable 1 155 000

Share Capital – Ordinary 1 155 000

f. Retained Earnings (50 000sh)(120)(12%) 720 000

Stock Dividends Payable 720 000

Stock Dividends Payable 720 000
Share Capital – Ordinary 720 000
P.226
Exercise #3
The total amount of Cash Dividends Payable for the first two transactions is P750 000,
the cash available for the corporation is only P300 000, P450 000 will be paid on the
next period.
P.227
Exercise #8
a.
Particulars Dividend Preference Ordinary

Dividends Declared 900 000

Preference (360 000) 360 000

Ordinary (540 000) 540 000

Total 0 360 000 540 000

P12/share P27/share

b.

Particulars Dividend Preference Ordinary

Dividends Declared 900 000

Preference (360 000) 360 000

Ordinary (120 000) 120 000

Balance for 420 000

Participation
Preference (315 000) 315 000

Ordinary (105 000) 105 000

Total 0 675 000 225 000

P22.5/share P11.25/share
 c.
Particulars Dividend Preference Ordinary

Dividends Declared 900 000

Current Dividend (360 000) 360 000

Passed Dividend (360 000) 360 000

Ordinary (180 000) 180 000

Total 0 720 000 180 000

24/share 9/share

d.
Particulars Dividend Preference Ordinary

Dividends Declared 900 000

Current Dividend (360 000) 360 000

Passed Dividend (360 000) 360 000

Ordinary (120 000) 120 000

Balance for 60 000

Participation
Preference (45 000) 45 000

Ordinary (15 000) 15 000

Total 0 765 000 135 000

P25.5/share P6.75/share

e.
 Particulars Dividend Preference Ordinary

Dividends Declared 900 000

Preference (360 000) 360 000

Ordinary (120 000) 120 000

Balance for 420 000

Participation
Preference limit of (90 000) 90 000
Participation
Ordinary 330 000 330 000

Total 0 450 000 450 000

P15/share P22.5/share