PROBLEM # 1

Effects of Transactions

Indicate the effects of each of the following transactions on Assets, Liabilities, Share Capital and Retained Earnings. Use +

Assets Liabilities Share Capital Retained Earnings

1. Declaration of cash dividends 0 + 0 -
2. Payment of cash dividends - - 0 0
3. Declaration of share dividends 0 0 0 -
4. Issuance of share dividends 0 0 0 -
5. A share split 0 0 0 0
6. Cash purchase of treasury stock - 0 - 0
7. Sale of treasury stock below cost + 0 0 +
tal and Retained Earnings. Use + for increase, - for decrease, and 0 for no effect.
PROBLEM # 2
Effect of Cash Dividend
Indicate whether the following actions would (+) increase, (-) decrease, or (0) not affect Bernal Inc.'s total assets, liabilities and

Assets Liabilities
1. Declaring a cash dividend 0 +
2. Paying the cash dividend declared in no.1 - -
3. Declaring a share dividend 0 0
4. Issuing a share certificates for the share dividend declared in no. 3 0 0
5. Authorizing and issuing share certificates in a share split 0 0
t Bernal Inc.'s total assets, liabilities and shareholders' equity:

Shareholders' Equity
-
0
0
0
0
PROBLEM # 3
Entries for Cash Dividends

The dates of importance in connection with a cash dividend of P35,000 on a corporation's ordinary shares are Jan. 2, Jan. 22, an
Required:
Journalize the entries required on each date.

Jan. 2 Retained Earnings 35,000

Cash Dividends Payable 35,000
To record declaration of dividend.

Jan. 22 No entry

Feb. 1 Cash Dividends Payable 35,000

Cash 35,000
To record payment of dividend.
ares are Jan. 2, Jan. 22, and Feb. 1.
PROBLEM # 4
Cash Dividends

Santiago Corporation's board of directors declared a P750,000 cash dividend on Sept. 1, 2018, payable on Oct. 1, to shareholde
Required:
Prepare all appropriate entries needed on the declaration, record and payment dates.

2018
Sept. 1 Retained Earnings 750,000
Cash Dividend Payable 750,000
To record declaration of dividend.

Sept. 15 No entries

Oct. 1 Cash Dividend Payable 750,000

Cash 750,000
To record payment of dividend.
8, payable on Oct. 1, to shareholders of record on Sept. 15.
PROBLEM # 5A
Small Share Dividends
The E. Delos Santos, Inc. board of directors voted on June 1, 2018, to declare a 10% share distributable on July 1, to sharehold
Required:
Prepare the entries needed on the declaration, record and payment dates.

2018
June 1 Retained Earnings 2,250,000
Shares Distributable
Share Premium
P45 per share (55,000 issued shares - 5,000 treasury shares) = 2,250,000

June 15 No entry

July 1 Retained Earnings 225,000

Shares Distributable
Share Premium
To record declaration of 10% share dividends.

Shares Distributable 50,000

Ordinary Shares
To record issuance of share dividends.
ributable on July 1, to shareholders of record as of June 15. On June 1, E. Delos Santos has 500,000 share of P10 par ordinary shares autho

500,000
1,750,000

50,000
175,000

50,000
f P10 par ordinary shares authorized, 55,000 shares are issued and 5,000 shares are held as treasury stock. E. Delos Santos stock is selling f
Santos stock is selling for P45 per share on June 1.
PROBLEM # 5B
Large Share Dividends

The Pallorina Corporation board of directors voted on Nov. 1, 2018, to declare a 45% share dividend, distributable on Dec. 31,
Pallorina's articles authorize the issuance of 200,000 shares of P40 par ordinary shares. As of Nov. 1, 2018, 50,000 ordinary sha
Required:
Prepare the entries needed on the declaration, record and payment dates.

2018
Nov. 1 Retained Earnings 4,250,000
Shares Distributable 2,000,000
Share Premium 2,250,000

Dec. 1 No entry

Dec. 31 Retained Earnings 1,912,500

Shares Distributable 900,000
Share Premium 1,012,500
To record the declaration of 45% share dividends.

Shares Distributable 900,000

Ordinary Shares 900,000
To record issuance of share dividends.
d, distributable on Dec. 31, to shareholders of record as of Dec. 1.
1, 2018, 50,000 ordinary shares are issued and outstanding. The market price of Pallorina stock on Nov. 1 is P85 per share.
PROBLEM # 6
Share Dividends

Assume the following data:

Ordinary Shares, P100 par value, 50,000 shares issued 5,000,000
Share Premium 200,000
Retained Earnings 2,000,000
Market Value-declaration date 150
Market Value-distribution date 170

Required:
For each of the following assumptions, prepare entries on the date of declaration and date of payment:

1. A 20% share dividends is declared on ordinary shares.

Retained Earnings 1,000,000

Shares Distributable 1,000,000
To record declaration of 20% share dividends.

Share Distributable 1,000,000

Ordinary Shares 1,000,000
To record issuance of share dividends.

2. A 10% share dividends is declared on ordinary shares.

Retained Earnings 750,000

Shares Distributable 500,000
Share Premium 250,000
To record declaration of 10% share dividends.

Share Distributable 500,000

Ordinary Shares 500,000
To record issuance of share dividends.
PROBLEM # 7
Dividends

On Dec. 31, 2019, L. U. Bacalso Corporation's shareholders' equity section of the statement of financial position follows:

Share Capital:

Ordinary Shares, P120 par, 2,000 shares

authorized, 1,000 shares issued and outstanding 120,000
Share Premium 6,000
Total Share Capital 126,000
Retained Earnings 48,000
Total Shareholders' Equity 174,000

On July 15, 2019, the board of directors declared a cash dividend of P12 per share, which was paid on Aug. 1, 2019. On Dec. 1
Required:
Prepare the journal entries for these dividend transactions.

2019
July 15 Retained Earnings 12,000
Cash Dividends Payable 12,000
To record declaration of dividend.

Aug. 1 Cash Dividends Payable 12,000

Cash 12,000
To record payment of dividend.

Dec. 1 Retained Earnings 14,400

Share Distributable 12,000
Share Premium 2,400
To record declaration of 10% share dividends.

Dec. 15 Share Distributable 12,000

Ordinary Shares 12,000
To record issuance of share dividends.
inancial position follows:

aid on Aug. 1, 2019. On Dec. 1, 2019, the board declared a share dividend of 10%, and the shares were issued on Dec. 15, 2019. Market va
Dec. 15, 2019. Market value of the stock was P144 on Dec. 1 and P168 on Dec. 15.
PROBLEM # 8

Marasigan Corp. had the following shareholders' equity section on its statement of financial position as at Dec. 31, 2018:

6% Preference Shares, P50 par,

100,000 shares authorized, 40,000
shares issued and outstanding 2,000,000
Ordinary Shares, P1 par, 1,000,000
shares authorized, 300,000 shares
issued 300,000
Share Premium-Ordinary 4,700,000
Retained Earnings 35,200,000
Treasury Stock-Ordinary, 10,000
shares at cost (320,000)
Total Shareholders' Equity 41,880,000

During 2019 the following events occurred related to shareholders' equity:

A. Sold 3,000 shares of treasury stock for P20 per share.

B. Declared and distributed as property dividend the investments in equity securities held by Marasigan to ordinary shareholder
The securities had a carrying value of P400,000. Its fair market value was P750,000 on the date of declaration, P760,000 on the
C. Declared a 5% ordinary share dividend. Market value was P40 per share.
D. Declared and paid the annual cash dividends to preference shareholders.

Required:
Prepare the journal entries.

A. Cash
Retained Earnings

B. Retained Earnings

Retained Earnings

Property Dividends Payable

 Property Dividends Payable

C. Retained Earnings

Ordinary Share Disbutable

D.
Outstanding Share Capital
Current Preference Dividends:
2,000,000*6%
Remainder to Ordinary:
2,000,000-120,000 = 1,880,000
Total
Dividends per share
ection on its statement of financial position as at Dec. 31, 2018:

eholders' equity:

tments in equity securities held by Marasigan to ordinary shareholders.

arket value was P750,000 on the date of declaration, P760,000 on the date of record, and P756,000 on the date of distribution.
was P40 per share.
nce shareholders.

60,000
260,000
Treasury Stock 320,000
To record reissuance of treasury stock.

750,000
Property Dividends Payable 750,000
To record declaration of dividend.

10,000
Property Dividends Payable 10,000
To record declaration of dividend.

4,000
Retained Earnings 4,000
To record declaration of dividend.
 756,000
Investment in Equity Securities 400,000
Gain on Distribution of Property Dividends 356,000
To record distribution of dividend.

600,000
Ordinary Share Disbutable 15,000
Share Premium-Ordinary 585,000
To record declaration of 5% share dividends.

15,000
Ordinary Shares 15,000
To record issuance of share dividends.

Preference Ordinary Total

2,000,000 300,000 2,300,000

120,000 120,000

1,880,000 1,880,000
120,000 1,880,000 2,000,000
3.00 6.27
e of distribution.
PROBLEM # 9
Entries for Share Dividends

E. Tan Med-Care Inc. is a health insurance corporation. The following account balances appear on the statement of financial po
:Ordinary Shares (50,000 shares authorized), P10 par, P400,000; Share Premium-Ordinary, P42,500; and Retained Earnings, P2

Reuired:
1. Journalize the entries to record

A. the declaration of the dividend.

Retained Earnings 240,000
Share Distributable 160,000
Share Premium-Ordinary 80,000
To record declaration of 4% share dividends.

B. the issuance of the shares.

Share Distributable 160,000
Ordinary Shares 160,000
To record issuance of share dividends.

2. Determine the following amounts before the share dividend was declared:

A. total share capital

B. total retained earnings
C. total shareholders' equity
Before Dividends
Ordinary Shares, P10 par, 400,000 4,000,000
Share Premium-Ordinary 42,500
Total Share Capital 4,042,500
Retained Earnings 299,500
Total Shareholders' Equity 4,342,000

3. Determine the following amounts after the share dividend was declared:

A. total share capital

B. total retained earnings
C. total shareholders' equity
After Dividends Increase (Decrease)
Ordinary Shares, P10 par, 400,000 4,160,000 160,000
Share Premium-Ordinary 122,500 80,000
Total Share Capital 4,282,500 240,000
Retained Earnings 59,500 (240,000)
Total Shareholders' Equity 4,342,000
r on the statement of financial position of E. Tan Med-Care Inc.
2,500; and Retained Earnings, P299,500. The board of directors declared a 4% share dividend when the market price of the stock was P15 a
ce of the stock was P15 a share.