neve srmenainnes_| FINANCIAL ACCOUNTING AND REPORTING __VALDUSIY/VALIX/ESCALA/SANTOS/DELA CRUZ RETAINED EARNINGS i 1. On January 1, 2019, an entity reported the following shareholders’ equity Share capital, 100,000 shares authorized, 50,000 shares outstanding, P100 par 5,000,000 Share premium 4,000,000 Retained earnings 5.000.000 ‘The board of directors declared a 10% share dividend on July 1, 2019, when the matket value of the share was P150. The share dividend was issued on October 1, 2019 when the market value of the ‘share was P180. The entity sustained a net loss of P1,500,000 for 2019. What antount should be reported as retained eamings on December 31, 20197 2,750,000 3,000,000 2,600,000 3,250,000 eege 2. An emtty reported the following shareholders' equity on January 1, 2019: ‘Share capital, P50 par, 300,000 shares authorized, 110,000 shares outstanding 5,500,000 Share premium 2,000,000 Retained eamings 5.000.000 (On January 31, 2019, the entity reacquized 10,000 shares at P100 to be held as treasury. On June 30, 2019, the entity declared and issued 20% share dividend when the market value per share was 150. On December 31, 2019, the entity paid a cash dividend of P20 per share. The net income for 2019 sas P6,000,000. What amount should be reported as unappropriated balance of retained ‘earnings on December 31, 20197 7,600,000 6,600,000 ©. 5,600,000 4. 4,600,000 3. On January 1, 2019, an entity showed the following shareholders’ equity: Share capital, PS per, 300,000 shares outstanding j 1,500,000 Share premium | 3.000.000 Retained earnings 5,000,000 ‘On July 1, 2019, the entity declared a property dividend of inventory payable on March 1, 2020. The inventory ad a P1,200,000 carrying amount and a fair value less cost to distribute of P1,500,000 on uly 1, 2019, P1,800,000 on December 31, 2019 and P2,000,000 on March 1, 2020. The net incotne for 2019 was P3,000,000. 1, What amount should be reported as retained earings on December 31, 2019? 8,000,000 ’. 6,200,000 6,000,000 4. 6,500,000 2. On December 31, 2019, the inventory should be reported at what amount? 1,200,000 i . 11300,000 : = 1,800,000 4. 2/000,000 3, What amount should be recognized as gain distribution of property dividend in 20207 300,000 600,000 I 800,000 0 poor 6690Page 2 4. OnJanuary 1,2019, an entity ha ordinary and preference shares outstanding. The incorporstors own ten ordinary Shares but no preference shares. On December 31, 2019, the entity declared dividends ‘on the ordinary shares payable on December 31, 2020. The entity decided to give the ordinary sharcholders a choice between receiving a cash dividend of PS00,000 per share or in the form of & noncash asset. The noncash assct is standard mode from the entity's car fleet. Each car has a fair value of P600,000 and carrying amount of P4S0,000 on December 31, 2019. The fac value of the «aris P700,000 on December 31, 2020. The entity estimated that 8036 ofthe ordinary shareholders ‘ill ike the option of te cash dividend and 20% wil elect forthe noncash asset |. What amount should be recognized as dividend payable on December 31, 20192 a. §,$00,000 . 5,200,000 ©. $1000.00 4. 6,000,000 2. What amount should be recognized 2 gain on distribution of property dividend in 2020 ifthe ordinary shareholders elected to receive the noncesh asset? 1. 2,000,000 6. 2'300,000 ©. 1,300,000 4. 1,800,000 5. On December 31, 2019, an entity declared a cash dividend of P4,000,000 payable March 31, 2020. On December 31, 2019, the entity reported socurnulited depletion of Pi,200,000, share capital of 5,000,000, shar> premium of PI $00,000 and retained earings of P3,000,000. What amount of liquidating dividend is included in the cash cividend declared on December 31, 20192 = 1,000,000 'b. 1's00,000 ©. 3,000,000 4. 1,200,000 6. Anentity provided the following data for the year ended December 31, 2019: Retained earnings unappropriated. January 1 2,000,000 Overdepreciation of 2018 due t prior period error, net of tax “400,000 Net income 3,000,000 [Retained carnings epproptiatea for treasury shares (orginal balance is P500,000 ‘but reduced >) P200,000 by reason of reissuance of the treasury shates) 300,000 Retained earnings ppropriated for contingencies (beginning balance P702,000, ‘but increased by current appropriation of P109,060) 800,000 (Cash dividends paid to shareholders 1,000,000 (Change in accoumning policy trom FIFO 10 2 average ~ credit, net of tax 300,000 ‘What isthe balance of uaappropriated retained earrings on December 31, 2019? a. 4,500,000 b. 4'800,000 . 4'700,000 4. 4.200.000 7. An entity provided the following information during the current year: ‘© Dividends on 10% 50,000 cumulative preference shams with P100 par value have not been eclared or pais for 3 years. © Treasury urdinury shares were acquired at a cost of 21,000,000 during the year. The treasury shares had not teen reissued at vearen. ‘©The entity appropriated P2,070,000 of cesained earnings forthe construction of a new plant, ‘© Cash of P3,500,000 was restricted forthe retirement of bonds payable. ‘What amount shouid be reported as uppropriated retained earnings? 3,000,000 4,500,000 7,500,000 6,500,000 pose END 6690