Midterm Assignment III – SHE-RE

Submission is on Monday, February 3, 2025

Short Problems
1) The company has an issued and outstanding of P20 par value ordinary share of 120,000 shares, a premium of P480,000 and an
accumulated profit of P1,540,000, how much would be the share premium at the end of the year, if assuming during the year the
company acquired 2,000 of its own shares at P70,000 of which 1,200 were reissued at P40/share while the remaining shares were
retired?

2) On January 1, 2024, Rexxar Corporation, whose shares are publicly traded, had 100,000 shares of ordinary shares issued and
outstanding. On April 1, 2024, the company issued 10% share dividends. On September 1, 2024, additional 9,000 shares were issued
for cash and on November 1, 2024, the shares were split on a 2 for 1 basis. How much would be the outstanding shares to be
reported by Rexxar at the end of the year?

3) Assuming that dividends of certain company on 1,000 shares of 6%, P10 par value cumulative preferred shares have not been
declared or paid for 3 years, and treasury shares that cost P15,000 were reissued for P8,000. How much of the retained earnings
should be appropriated as a result of the given items?

4) On July 1, 2024, B Company’s board of directors declared a 10% share dividend. The market price of B, 400,000 outstanding Ordinary
Shares, P50 par value, was P80 per share on the date of declaration. The stock dividend was distributed on September 1, 2024, when
the market price of the share was P100 per share. How much should be charged to the Retained Earnings as a result of the stock
dividend?

5) Luther Inc., has 2,000 shares of 6%, P50 par value, cumulative preferred stock and 100,000 shares of P1 par value common stock
outstanding at December 31, 2024, and December 31, 2023. The board of directors declared and paid a P5,000 dividends in 2023. In
2024, P24,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2024?

6) Anders, Inc., has 5,000 shares of 5%, P100 par value, cumulative preferred stock and 20,000 shares of P1 par value common stock
outstanding at December 31, 2024. There were no dividends declared in 2022. The board of directors declares and pays a P45,000
dividends in 2023 and in 2024. What is the amount of dividends received by the common stockholders in 2024?

7) Pierson Corporation owned 10,000 shares of Hunter Corporation. These shares were purchased in 2020 for P90,000. On November
15, 2024, Pierson declared a property dividend of one share of Hunter for every ten shares of Pierson held by a stockholder. On that
date, when the market price of Hunter was P14 per share, there were 90,000 shares of Pierson outstanding. What gain and net
reduction in retained earnings would result from this property dividend?

8) Hernandez Company has 350,000 shares of P10 par value common stock outstanding. During the year, Hernandez declared a 10%
stock dividend when the market price of the stock was P30 per share. Four months later Hernandez declared a P.50 per share cash
dividend. As a result of the dividends declared during the year, retained earnings decreased by

9) At the beginning of 2024, Flaherty Company had retained earnings of P200,000. During the year Flaherty reported net income of
P100,000, sold treasury stock at a “gain” of P36,000, declared a cash dividend of P60,000, and declared and issued a stock dividend
of 3,000 shares (P10 par value) when the market value of the stock was P20 per share. The amount of retained earnings available for
dividends at the end of 2024 was

Written, Inc. has outstanding 300,000 shares of P2 par common stock and 60,000 shares of no-par 8% preferred stock with a sta ted value
of P5. The preferred stock is cumulative and nonparticipating. Dividends have been paid in every year except the past two years and the
current year.
10) Assuming that P150,000 will be distributed as a dividend in the current year, how much will the common stockholders receive?
11) Assuming that P63,000 will be distributed as a dividend in the current year, how much will the preferred stockholders receive?

The following information is available for Barone Corporation:

January 1, 2024 Shares outstanding 1,250,000
April 1, 2024 Shares issued 200,000
 July 1, 2024 Treasury shares purchased 75,000
October 1, 2024 Shares issued in a 100% stock dividend 1,375,000
12) The number of shares to be used in computing earnings per common share for 2024 is

13) At December 31, 2024 Rice Company had 300,000 shares of common stock and 10,000 shares of 5%, P100 par value cumulative
preferred stock outstanding. No dividends were declared on either the preferred or common stock in 2024 or 2025. On January 30,
2026, prior to the issuance of its financial statements for the year ended December 31, 2025, Rice declared a 100% stock dividend on
its common stock. Net income for 2025 was P950,000. In its 2025 financial statements, Rice's 2025 earnings per common share
should be

Long Problems
The stockholders’ equity of the SJS Manufacturing showed the following data on December 31, 2024:
SHARE CAPITAL – 12% Preferred Shares, P30 par P 2,250,000
SHARE CAPITAL – Ordinary Shares, P50 par 5,000,000
SHARE PREMIUM – Preferred Shares 600,000
SHARE PREMIUM – Ordinary Shares 1,800,000
RETAINED EARNINGS 775,000
The 2025 transactions of the company affecting its stockholders equity are summarized chronologically as follows:
 Issued 15,000 shares of preferred shares at P40.
 Issued 52,500 shares of Ordinary shares at P70.
 Retired 3,000 shares of preferred shares at P45.
 Purchased 7,500 shares of Ordinary at P80 as treasury shares.
 Declared a stock split of two for one, reducing the par of Ordinary to P25.
 Reissued 7,500 shares of treasury shares as a result of stock dividend to Ordinary. Market value of Ordinary shares at that date was
P50.
 Received 5,000 shares of Ordinary as donation from stockholders when share had a market value of P52. ½ of these were
subsequently issued for P54.
 Dividends were paid at the end of the year paying the ordinary shareholders P1.50 per share.
 Net income for the year was P1,400,000.
1. Prepare all entries for 2025 and prepare the statement of retained earnings for the year ended December 31, 2025.
2. Compute for the outstanding ordinary share as of December 31, 2025.