This document contains accounting information for Negros Grains, Incorporated including details of their issued share capital, accumulated profits, and cash dividends declared. It also provides journal entries to record the declaration and payment of cash dividends for two classes of shares. Finally, it includes schedules calculating cash dividends distribution per share for preference and ordinary shares under different scenarios: a) non-cumulative, non-participating b) cumulative, non-participating c) non-cumulative, fully participating d) cumulative, fully participating.
This document contains accounting information for Negros Grains, Incorporated including details of their issued share capital, accumulated profits, and cash dividends declared. It also provides journal entries to record the declaration and payment of cash dividends for two classes of shares. Finally, it includes schedules calculating cash dividends distribution per share for preference and ordinary shares under different scenarios: a) non-cumulative, non-participating b) cumulative, non-participating c) non-cumulative, fully participating d) cumulative, fully participating.
This document contains accounting information for Negros Grains, Incorporated including details of their issued share capital, accumulated profits, and cash dividends declared. It also provides journal entries to record the declaration and payment of cash dividends for two classes of shares. Finally, it includes schedules calculating cash dividends distribution per share for preference and ordinary shares under different scenarios: a) non-cumulative, non-participating b) cumulative, non-participating c) non-cumulative, fully participating d) cumulative, fully participating.
8-5 The following corporate data were taken from the records of Negros Grains, Incorporated. 7% Preference Share, P50 par – 2,000 shares were issued. Ordinary Share, P100 par – 3,000 shares were issued. Accumulated Profits(Losses), P110,000 P80,000 is declared as cash dividends. No dividends were declared in the past two (2) years. Required: 1. Perform journal entries to record the declaration and payment of cash dividends when there are two classes of shares being issued. UPON Accumulated Profits(Losses) disclosed DECLARATION Cash Dividends Payable – P dc Cash Dividends Payable – O dc # UPON Cash Dividends Payable – P dc DISTRIBUTION Cash Dividends Payable – O dc Cash dc # 2. Prepare a Schedule of Cash Dividends Distribution showing the dividends per share assuming that preference shares are: a) Non-cumulative and Non-participating Total Preference Ordinary 400,000 100,000 300,000 Outstanding Share Capital x x x Preference Share Dividends: Current Year – P100,000 x 7% 7,000 7,000 Ordinary Share Dividends: Balance to all Ordinary P80,000 – 7,000 73,000 73,000 As Distributed 80,000 7,000 73,000 Dividends per Share 3.50 24.33
Dividends per Share:
Preference: P7,000/2,000 shares issued = P3.50 Ordinary: P73,000/3,000 shares issued = P24.33 b) Cumulative and Non-participating Total Preference Ordinary 400,000 100,000 300,000 Outstanding Share Capital x x x Preference Dividends: Arrears – P100,000 x 7% x 2 years 14,000 14,000 Current – P100,000 x 7% 7,000 7,000 Ordinary Share Dividends: Balance to all Ordinary (P80,000 – 14,000 – 7,000) 59,000 59,000 As Distributed 80,000 21,000 59,000 Dividends per Share 10.50 19.67
Total Preference Ordinary 400,000 100,000 300,000 Outstanding Share Capital x x x Preference Dividends: Current Year – P100,000 x 7% 7,000 7,000 Ordinary Dividends at Preference rate: Current Year – P300,000 x 7% 21,000 21,000 Balance for Participation 52,000 Preference: ¼ x P52,000 13,000 Ordinary: ¾ x P52,000 39,000 As Distributed 80,000 20,000 60,000 Dividends Share 10.00 20.00
Dividends per Share:
Preference: P20,000/2,000 shares issued = P10.00 Ordinary: P60,000/3,000 shares issued = P20.00 d) Cumulative and Fully participating Total Preference Ordinary 400,000 100,000 300,000 Outstanding Share Capital x x x Preference Dividends: Arrears – P100,000 x 7% x 2 years 14,000 14,000 Current – P100,000 x 7% 7,000 7,000 Ordinary Dividends at Preference rate: Current Year – P300,000 x 7% 21,000 21,000 Balance for Participation (P80,000 – 14,000 – 7,000 -21,000) 38,000 Preference: ¼ x P38,000 9,500 Ordinary: ¾ x P38,000 28,500 As Distributed 80,000 30,500 49,500 Dividends per Share 15.25 16.50