Problem 16-27 (ACP) “Tho fllowing aczounta appear inthe December 31,2015 teal balance of Mara Compan Problem 16-29 (PHILCPA Adapted) ‘The shareholders’ equity of Glee Company revealed the* following information on Dacember 31, 2013 2 soe.e9 eet a, P100) Senses iene hare cata P10 par s.a0g00 Suhcribed sere capital Ccewono eicoenconhen ee a0 00 Saw = ‘SOntinary share capital, P15 par 5,280,000 ce es Sea | Share prema Some meat caring oi sree [attend ordinary sare cat “ee Eealtncorarte pees Retinndcarnnes ‘away care test eae Neepele ‘omooo See renvile-ordnay ‘oocee On Decomber 31, 2013, what amount should be reported a8 total shareholders’ equity? How much is the legal capital? i, S5o0.000 @ 8050000 P is200 P Hesao00- S88 © Sssoae Pard Problem 1626 (AA) : Problem 16-30 (AICPA Adapted) ‘The following accounts appear in the December $1, 2013 trial balance of fey Company “The adjusted trial balance of Kaingn Company on December 31,2013 tnluded te fllowing acsounte Preference share ait atoriond P00 pat 00000 Dray cherapealaaincaed Popes Soa sar cphal ss 000.000 {t Unereck reference areca) Fe) Sarpeemion 3.0000 nsoued dry care capt 1000,000 ‘Treasury shares at coat 2.000 7 Seberptonsecirate linary ‘co Fee eden dais Schemetem reat crea) rd Uren ee frwardcontrat deviated Preference share capital subscribed 300,000 Cri anne Ordinary share capital subscribed 220,000 Retained exruings uneppenpristed oni (C Treasury preference share (700shares con) ‘50,000 Retained earnings approprited 3,000,000 Sareyeeaias Dine sae Roveleaon url’ ‘toonan0 Eel 3000000 ‘Camulaive tenlatonajurtment—ceeit 130600 ‘What amount should be reportd as total chareholders' equity? Ee '81,500,000- 32,800,000 ‘2\ 28,500,000 35,500,000 ‘What is the shareholders’ equity on December 31, 2018? Q 8,890,000 & 7200,000 ©. 6520000 : 780,000 ~ Bt FE bpne aide 766 om 167PROBLEMS: Problem 17-1 Multiple choice (SFAS 18 Adapted ) 1. Nonstock dividends shall be recognized ae liabilities on the a. Date of declaration Date of record © Date of payment @. Date of fseuing check ‘When shareholders may elect receive cash i liew of stock dividend, the amount to be charged to retained earnings Js equal to the Optional cash dividend Pair value of the shares © Par value of the shares 4. Book valve of the shares ‘Treasury shares may bo reissued as dividends, in which case what amount shall be charged to retained earnings? Cost ofthe treasury shares Par value of the treasury hares air value of the trestury shares on the date of declaration 4. Fair value of the treasury shares on the date of If th stock dividend isles than 20%, how much of the retained earnings shall be capitalized? Fair value of the shares on the date of declaration Fair value of the shares on the date of record Fale value of tho sheres on the date of issuance sy inaued what ia called a "20% stock dividend” re capital At what amount por shere, if aay, « ined earnings be redoed for this transaction? S.An en should 8. Zoro because no entry is made b Par value ©. Markot value at the dec 4. Market value at the date of isuance 16, Which of the fol stock dividends? ying statements it true concerning LA stock dividend does not give rite to any chango in tither the entity's assets or the shareholders! proportionate interest therein. 1, Stock dividend shouldbe recorded on the dat doled. a Tonly & Tenly © Both Tana tL 4. Neither T nor It Aeclare, ‘In closely held entities, if stock dividends retained easnings aball be capitalized at 1a. Par or stated value . Careying amount ©. Fair value on date of declaration 4. air valu on date of issue 48, Which of the following statements is incorrectn relation to vetainod earnings? a. Appropriated retained earnings thall be clearly distinguished from unappropriated retained earnings, b, A debit ie a debit balance in retained earnings, ©. Adefisitin retained earnings is presented as an asset. When the deficit exceeds the total of the other capital fccount balances, the excees in capital deficiency. s179. Incertain cases, atock dividends are declared onthe basis of a proposed increase in authorized share capital, the ‘application for which has boon filed but net yet approved by the’ SEC at the reporting date, Under these circumstances, which may not be done? 1 The propoced increase and such dividend declaration goncrally shall not be reflect in the statement of financial postion pri to SEC approval b. These matters shall be disclosed in the not. financial statements, suthorized share capital may be presented and the stock dividend may be shown as Dart of iad share eapial, 4. A’note to the Snancial statements is unnecessary to disclose the fact that the proposed increase and dividend declaration have been reflected in the Baancil statements, 10. Appropriations of retained earnings, if reflected in ‘toparnts account, hall be reported te ‘Component of equity as part of share premium 1 Component of equity apart as total retained eurings ©. Component of total abilities as current liability 44 Component of total abilities as noncurrent liability Problem 172 Multiple choice (IFRIC 17) 1. An eitity shall measure a liability to distribute nonce ‘asst as dividend to ite owners at the ying amount of the asset distributed air valuo of the aaset ditributad ©. Either the carrying amount oF fair value of the asset distributed 4. Neither the carrying amount nor fair value of the ‘ast distributed s18 4th hi sy dnd ol nmin J declaration of Uw dividend by management or RE‘ decor in approved by the relevant Stunt, for example, the ahereholdes, i the ladon egeiren sch appro I. When the dividend in declared by management oF the ‘board of dirctors if the juradiction does not require further approval a. Tonly b. Henly ©. Either Tor It 44 Neither T nor ID ‘ 2. An entity shall review and ait the carrying amount Ae Euidend pevebl the endo ash porting period Shu‘at the dete of settlement wth any change ka the SEiying tmount of te dividend payable recognized a. Incquity as adjustment tothe amount of distribution. bh In profit or lose © As adjustment of equity rasoeve {4 As component of other comprehonsive income. 0 shal 4. When an entity stl ehe dividend payable, shal Terognize to diference betwen he carving amour of The act distributed and the carrying amount of the vided payable in Profit or loss Other comprehensive income Equity Retained earnings s195. An entity shall measure e noncurrent asset classified as hhld for distribution to owners at a. Carrying amount 1 Fair value lee cost to distribute ‘& Lower of carrying amount and fae valueless cost to distribute 4. Higher of earrying amount and fsir vale leas cost to distebute Problem 17-8 Multiple choice (AICPA Adapted) 1. An entity declared « cash dividend on a certain date, payable on another date, Retained earnings would 1. Increase on the dato of declaration 1b Not be affectod on the date of declaration 4 Not be affected on tho date of payment Decrease on the date of payment 2. ‘The “actual total amount” ofa cash dividend tobe paid ia determined on the date of Record Declaration Declaration or rocord, whichover is earlier Payment '3.A dividend which ia return to shareholders ofa portion of their orginal investment is Liquidating dividend Patronage dividend Liability dividend Participating dividend 4. An entity declared a dividend, a portion of which was iMguidating. How would this declaration affect each of the following?” Contributed capital Retained earnings a Decrease No effect Decrease Decrosse @ Noclfect Decrease No cffet Noes 5, How would the declaration of liquidating dividend affect tach of the falowing? Contributed capital ‘Retained earnings No effect Decrease Decrease No effect No effect No effect Decrease Deerese sor shall directly charge rotained earnings forthe ‘2 Two for one share eplit 1B. Share options ©. Ton pereent share dividend 4 Share appreciation right 1The inauer shall directly charge retained earnings for the par value of shares iseued in ‘a. 1 for § share dividend 1B. Lfor 8 share dividend 4 for Labare eplit 4&2 for 1 share oplt 8.1F the issuing entity has only one class of share capital, {ransfor from retained earnings to share capital equal the fair value of the shares issued is ordinarily a ‘characteriatie of ‘a. Either a share dividend or share split, 8. Neither s share dividond nor share split Share apit but not a share dividend 4. Share dividend but not a share split sax 9. Total shareholders’ equity ie not affected by th ‘a. Tesugnce ofa share dividend . Congprsion of bonds payable into share capital ©. Sale of treasury shares at more than cost 4. Declaration ofa cash dividend 0. How would the declaration and subsequent issuance of 10% share dividend by the iseuer affect each of the following when the fair value of the shares exeseds the par value of the shares? Share capital No effect Share premium 8 No effect be No effect Increase © Increase No elect a Increase Tere Problem 17-4 Multiple choice (AA) 1 An entry is not made on the ‘a. Date of declaration B. Date of record «©. Date of payment @ An entry is made on all ofthese dates Cash dividends are paid on the basis of the number of shares Authorized Tasued Outstanding Outstanding less th umber of trearury shares see Which of the following statomer Aividende is mot true? 6 about proper 1 fora of A property dividend is usually in tetra on aa act A rapery vend sala called ¢ dividend in 2 Me gecotatng fora property dividend should Teled‘on the camrying amount of the nonmon!7 fase raaforred a ATE thee tatements are true I an entity wishes to “capitalize part of the earninssit ‘a. Cash dividend 1b, Share dividend 2 Property dividend 4. Liguidating dividend Liquidating dividends Are prohibited under PFRS 0 credit to share eapitel mounts paid in by shareholders alike a shave split, « share dividend requires a fama Journal entry because 2 ESE Se ay oe 4. Sh dnt pn ee tom ei When a dividend is declared and paid in stock 8238. Undisteibuted stock dividends shall be reported as a. A current linbilty. B AAn addition to shexe capital outat ¢. A'reduction in total sharebolde A note to the financial statorcent, 8. Which of the following would not affect retained f. Conversion of preference share into ordinary share B Share split a Treasury share transaction Stock dividend 10.How would retained earnings be affected by the declaration of each of the fellowing? Stock dividend Share split a Decrea B Noeffeet © Noetfct 4 Decrease Problem 17-5 Multiple choice (IAA) 1.A retained earnings appropriation is used to a. Aboorb fire los when an entity is eli 1 Provide for « contingent lo ‘measurable, «¢ Smooth periodic income, 4. Restrict Carnings available for dividends 2.An appropriation of retained earnings for futuro plant ‘xpantion wil result in “ » red. that ie probable and ‘4 Thoostabishment of «fund to finance the future plant expansion, b. Tho setting aside of cash 20 be used for future plant expansion © Avdccrease in cash with an equal increase ia {nvostment in fund a The dodosure that management doesnot inten distribute in te form of Sits snets equal ots fsmount of appropriation 24 8. The retained earings appropriated account is created for the purpose of fa Barmarking cash to be ueed for particular puro Insuring the payment of dividends © Protecting the working capital position {Preventing Tooce from contingencies 4.A restriction of retained earnings is most likely to be required by 1 Incuering a not loss in the current year 1 Inourring a net los inthe prior year. ©. Purchasing treasury shares. &. Reissuing treasury shares 15. Which of the following ia most likely to be found in corporate law regarding payment of dividends? Dividends may be pai from legal capital Retained earnings are availabe for dividends unleas retrictod by contractor by statute ce Unrealized capital is available for any type of dividend 4. Capital from donated 6 ots is available for dividends. 6.For which of the following purposes should an appropriation for possible loes contingencies b ntablished? ‘To match applicable cote with current revenue "To reduce fluctuations in not income in order to Tend stability of the entity ©. To charge operations in periods of rising prices for the losses which may otherwise be absorbed in periods of falling prices 44. To inform shareholders that a portion of retained earnings should be et aside from amounts available {or dividends becaues of such contingencies.7.Which of the following statements is incorrect concerning appropriations of retained earnings? ‘Appropriations of retained earings do not change the total amount of shareholders! equity. 1b. Appropriations of retained earzings reflect funds wet aside for a designated purpose, such as plant ‘expansion. Appropriations of retained earnings can be made as ‘result of contractual requirements. 4. Appropriations of retained earnings can be made at the discretion ofthe board of directors, 8 Which of tle following statements is incorrect concerning appropriations of retained earnings? ‘4 Appropriations do not reduce total retained earnings 1. The only proper way to eliminata an appropriation of roteined camnings after it has served ita purpose isto revert to the unappropriated retained earnings. ‘¢ An appropriation of retained eaknings does not mean that assets aro segregated for a specific purpose, 4. Whon treasury shares are purchased, retained earnings must be apppropriated equal to the par or Sted valu of the tronsuty share. i. 8.The use of equity reserves under international accounting standards 4 Ie tric voluntary on the part ofthe management ot an entity 1, Ta sed on whether a roserve is part of distributable ot nondiatibutable equity, c. Is primaniy for the Benet of shareholders rather than eeditre 4. Rents in the elimination ofthe retained earnin, ‘category from the total equity of an entity. i 826 10, Under international sccounting roquirements, which of the following equity recerves is part of distributable | Par value of aharos Capital redemption reserve Revaluation reserve Retained earnings Problem 17-6 Multiple choice (AICPA Adapted) 1.'The primary purpose of quasi-reorganization is t0 give tn entity the opportunity Obtain relief from creditors Revalue understated assets to far value Blimineto a deficit in retained earnings Form a new corporation 2. When an entity goes through a quasi-roorganization the Carrying amounts in the statement of financial postion fae stated at a Original cost Replacement cost ©. Fair value 4. Original book value Conditions warranted that an entity should have quasi reorganization, Immediately after the quasi ‘eorganization, the retained earnings account Hae 2er0 balance Remains the same ax it was before the quasi reorganization. Frozen and daéed and subsequent transactions will bo shown separataly 4. Has e debit balance equal to the witadown of the assets which were overstated 8274.The accounting for # quasi-reorganizatios The ac @ 8 usually 4. Writeup of assets and writedowa of retained ea i Wrtedovn af bth sets tad retained enn € Writedown of aeeta and elimination of «dete 4, Writeup of aesets and elimination of a deficit. 5. An ont with a substantial dtc undertakes a quasi Tmoranization. Certain nats wil be rite doe {hat pect ir vale Lites il mein son ow would the entries to record the quae) rorganiat affect each of the following? . _ Share capital "Retained earnings Insvae Decree & Doser Not © Bomsses Insane a Noctee Innes Problem 17-7 (ACP) On December 81, 2018, Zebra Compan shareholders’ equity showed the fllowing ‘Share capital, P100 ar, 10,000 shares authorize, 5,000 share ewe. Share premise ‘evo. ete arg aren ‘reamary share, 8,00 at cont “m0 On December 31, 2013, Zebra Company decla Sividend of P90 or share fo sharchalders of seco on Sananry 15,2014 and payable on danuary 91, 2014 Required: repare journal etry on December 2014 and January 31, 2014. ae Problem 17-8 (ACP) CCandel Company owned 10,000 shares of equity securition SERV Company with earrying amount of P9D per share. On ‘Getuber 91,2013, Candel Company declared these shares ‘property dividend eo be paid on March 81, 2014, ‘The quoted price for XVZ share is P10 on October 31, 2018, ‘Piso on Desember 3, 2013 and P110 on March 31, 2014 Required: Prepare journal entries in conncetion with the property dividend Problem 17-9 (AICPA Adapted) Lellanie Company's shareholders equity on January 1, 2018 if as follows: Sharecpitl 3.500000 Share premium $000,000 Retained earnings 500.000 Lailanie Company had 400,000 authorized shares of PS par ‘yl, of which 300,000 shares were issued and outstanding On March 1 2012, Leilani Company acquired 60,000 shares for PIO per share to be held as teasury. The shares were originally iasued at PS per share, Lelanie Company uses the cost method to account fbr teasury shares, ‘On July 1, 2018, Leilanie Company declared a property Gividend of inventory payable on March 1, 2014. The {nventory had a P1,200,000 earrying amount and afer value { P1,500,600 on duly 1, 2013, 1,800,000 on December 31, 2013, ‘tnd F2,000,000 on March 1, 2014. The net income foe 2013 wat 3,000,000. Required: ‘Prepare journal entree for 2018 and 2014 in connection with Arensury shares, property dividend and nat income. 820= Problem 17-10 GFRS) On October 1, 2013, Greoce Company declared a property dividend of machinery payable on April 1, 2014 Thecartyiny amount of the machinery is P4,000,000 on October 1, 3013 ‘The machinery had the Zllowing fate value Getcber 1.2018 2.800000 December 312018, eco aoa E30 sreno00 Required: Prepare journal entries for 2013 and 2014 in connection with the property dividend. Problem 17-11 (FRS) On January 1, 2013, Easy Company had ordinary and preference shares outstanding. The incorporators or original shareholders own ton ordinary shares but no preference shares. On December 31,2013, the entity declared dividends on the ordinary sharea payable on July 1, 2014. The entity decided to give the ordinary shareholders a chai bosses ‘ceiving a cash dividend of P500,000 per share or a property dividend in the form of a noncash asset, The noncech nasey isa standard model from the entity's ear Meet. Bach ear has A fir value of P600,000 and carrying amount of P40v,c00, ‘Tho entity estimated that 80% of the ordinary shareholders will take the option of the cash dividend and 20% will eect for the noncash asset, Required: 1. Prepare journal entries for 2013 and 2014 assuming the ‘shareholders have chosen the cask alternation 2 Prepare journal entries for 2019 und 2014 assuring ihe shareholders have chosen the noneats alternate and the fair value ofthe car 30 Problem 17-12 (ACP) ‘Valerie Company showed the following dacs: Poo, 50,000sharesiseued 5,000,000 Share capital parva . now Retained earings unt 2eco.at0 Market vac of sha on declaration d % Market vals ofehare on dtibution date Required: For each of the allowing, prepare journal entree on the date of declaration and date of payment: 1 A 20% stock dividend is declared. 2. A 10% tack dividend is declared, Problem 17-18 (ACP) [Nikko Company showed the following balances: 3,00,000 ‘Share capital aitoriedPI00 pr, 0000 caree 00 Share capital unnmid, 20 000ahaee 2esoete Subscribed share capital, 1000 shares Laxote ‘Treamy shares (400 necost) ca Retaecdearaines 1.500.000 Market vals ofshare “Ondocarstion dato 1 Oninruance date Required: Prepare journal entries assuming the Board of Directors declared! 1A stock dividend fom unis sare apt one share ie ech ten shares cuataning stock dividend tom the teary shares of one share » ertach ten she ouatnding Te cnt of the teary Shoes copa sarProblem 17-14 (IAA) Michelle Company showed the following data Preforence share capital par value P20, 10,00 shares suthorize, 80000 eharearsed Ordinary share capital, par value P10, 200,000 shares. toad {00006 chscrned 100.000 scnodeamines Zomeoe Matar yl ofthe on tec decaraton: Petreneshare » nina sane % Required: For cach fhe lowing prepare jr entig on the at of declaration and date of payment: - A 100 ordinary sack dividend i declared on ordinary ». 60% ordinary stock dividend is declared on ordinary © A.10% ordinary stock dividend i Aeclared on both ‘ordinary and proference th ‘An ordinary stock dividend ie declared whereby each ordinary shareholder shall receive one ordinary share for every five shares held In view of the ratio of new shares to old shares, it ia necessary that fractional share warrants be issued to various shereholders calling for 8,000 sha nly 90% ofthe warrant returned in andthe remainder 332 Problem 17-15 (IAA) Selected transactions of Nation Company for 2013 and 2014 are a8 follows 2013 Sopt, 15 Declared « 20% stock dividend on 100,000 shares, per value PIO, The shares were originally sold at Oct 15. Distributed the stock dividend declared on September 15 which included fractional warrants for 2,000 shares ee, 1 One thoutand five mand » for fractional warrants. The remaining warrants 2014 2 re payable Sopt.15 Declared scrip dividend of P2 per share payab fn November 15, 2014 with interest at 12%. Nov. 15 Paid the serip dividend ec, 1 Desare a dvidend o1 sare of Sharp Company » ‘on every share of National Company owned. Sharp Coane hee we cared ats cot of PO yer SemPen he market value Paper share 31 Distributed the Sharp Company shares to shareholders, The market value of Sharp Company share is PS. Required: Prepare journal entries to record the transactions, 838Arroblem 17-16 (ACP) Oriental Company showed the following balances on December 31, 2013: Wasting amet Accualated depletion ‘200.00 Sharcaptal, P00 par Leno Capitalimatatst sooone Retsinedearings on Qn December 31,2019 the Board of Directors declared « dividend of P30 per share. tered Required: Prepare journal entry fr the declaration of the divden and the subsequent payment. ae! Problem 17-17 (IAA) ‘As a result of an agreement with bondholders, Malice Company is required to appropriate earninge of P200,000 at the end ofeach calendar year for the years 2008 t9 2013, AL the beginning of 2014, upon liquidation of the bonded indebtedness of 1,000,000, the retained earsnee ppropriation is canceled ‘This is Gllowed by the declaration and the issue of a 30% tock dividend on 280,000 outstanding shares with P10 pos value. Tho market value is PIO per share, Required: 1. Propare journal retained earnings 2 Prepare journal entry for the payment of the bonds payable 8, Prepare journal entry for the cancelation of the appropriation. 4. Prepare journal entry for the issuance of the sto dividend. the stock ntry for the annual appropriation of a4 Problem 17-18 (ACP) Suits for damages totaling P500,000 are pending against Sony Company on December $1, 2013. Counsel for the entity fadvised that loses on such tuts are not probable However, the management of the entity authorized that provision be made in the acount for any possible loss up to 500,000, The suit was settled in 2014 and payment of 200,000 was made. Required: Prepare journal entries to record ‘4. The provision for lanes authored by management in 2013, 1b Payment made in 2014 {© Cancelation of the provision for possible loss in 2014, Problem 17-19 (IAA) ‘The board of directors of Mazda Company decided to embark ‘ona substantial plant expansion. ‘Todemonetrate the nocd to retain assets inthe entity, the board ‘agreed on December 31, 2013 to authori an appropriation of Tetained earnings in the amount of 5,000,000, the anticipated ‘ost of plant expansion ‘The plant was partially constructed on December 31, 2014, fand the board decided to reduce the appropriation by 3,000,000, the cost incurred to date Finally, in July 2015, the plant was completed and the ‘remaining portion of the appropriation Was removed Required: reduce and finally remove Prepare journal entre to reco the’ appropriation 835roblom 17-20 (IAA) ‘Th shareholders’ equity of Rosan Company on January 1, 2013 showed the following Share capital, 100 par, 10,000 sharee ‘tthoriand, 5,000 charesiasued 5.000.000 ‘Share premium ‘ooo00| Retained eran 1,500,000 ‘During the current year, Resan Company had the following 1 In February, Rosan Company reacquired 6,000 shares for P90 per share. 2. Indune, Rosin Company sold 2,000 shares ofite treasury for P120 per share 3. InSeptember cach shareholder was issued for each share hheld one stock right to purchase two additional shares {for P140 per share. The righte expire on December 31, 2013, 4. In October, 10,000 stock rights were exerted when the ‘market value was P160 per share 5. On December 15, 2013, Hosen Company declared its frst cath dividend to shareholders of P20 por share, payeble fon January 10, 2014, to shareholders of record on December 31, 2013 6. On December 21, 2013, Rosan Company formally retired 2.000 treasury shares. 1. Net income forthe year was P540,000. 8 Appropriated rotained earnings equal to the cost of treesury shar Required: « ‘Prepare journal entries to record the transactions be. Preparo a statement of changes in equity for the year ‘ended December 31, 2013, ©. Present the shareholders’ equity on December 31, 2013 836 Problem 17-21 (IAA) ‘The shareholders’ equity of Marimer Company on January 12019 ie ae fallow: 6.000.000 ‘on.o00 1.86000 ‘Share capital, 100 par ‘Share premio Resrned earnings tions during the year and other information relating holders equity accounts were as follows! On January 26, Mavimar Company reacquired for cash $5,000 chases for PLLO per share. (on April 4, Marimar Company sol for cash 9,000 shares Sa asa for Pad per sare (Oa dune 1, Marimar Company declared a cash dividend GFbz0 per share payable duly 5, to shareholders of record ‘on duly 2 November 1, Mavimar Company dared a 2 fr 3 Sg Nowgmbt acd the par valu rom P100 to P60, Om se and SePShdet were nerd for he share ei (0 December 5, 4,000 shares wore issued in exchange for a econd hand equipment: The equipment orginally ‘ce P90 000, was eared by the Previous owner at a arrging amount of P200,000 and was fairly valued at $260,000. [Net ineome forthe yoar was P1,730,000. Appropriated retained earnings equal to the cost of treasury shares Required: ‘Prepare journal entree to record the trantaction. me tatement of changes in equity for the year equity on December 81, 2018. 937Aroblem 17-22 (IAA) (On Janwary 1, 2013, Nissan Company bed an ordinary share apital of 4,000,000 authorized shares with P20 par talus, of ‘hich 1,000,000 shares were iasued and outstanding ‘The sharcholders' equity on January 1, 2019 revealed the following balances Ordinary shar capital ae Share premismn ae Retained eninge 200000 ‘Transactions during the year and other information relating to shareholders’ equity accounts were 1. On January 5, Nissan Company issued at P54 per share, 100,000 preference shares with PO par value and 9% ‘cumulative. Each preferencs share is convertible, at the option of the holder, into two ordinary shares, Nisaaa Company had 400,000 authorizd preference shares 2 On February 1, Nissan Compaay reacquired 10,000 ordinary shares at P82 per share, & On April 30, ‘Company cold 280,000 ordinary shares at P34 por share, 4 On June 18, Nissan Company declared « cash dividend of P2 per ordinary share. payable on July 13: to Shareholders of record on July On November 19, Nissan Company sold 5,000 shares of treasury for P42 per share. 6. On December 15, Nissan Company declared the yearly cash dividend on preference share capital, payable og ‘January 14, 2014 to shareholders of record on December B12018 7. The net income for the year was P3,600, 000. 8 Nissan appropriated retained earnings equal to the cast of teasury shares Required: ‘@. Prepare journal entries to record the transections 1, Prepare a statement of changes in equity for 2013, ©: Present the shareholders’ equity on December 81, 2018 838 Problem 17-28 (AICPA Adapted) rot anions wartant tha the Pech Cnnpany shuld Cdr aun eorgunieton o Desaber 3,208 Selected items prior to the quasi-reorganiastion are: 1. ventory was recorded on December 31, 201, at cost of 250,000 Th aval ofthe irventory was P00, 000, recorded at 2 Property, plant end equipment were Decomber3, 2018, a¢ PEOOG O00 net fhe seumelated Aepreciation. The far value of the Property was sfon o00 ‘8, Tho par value of the share capital isto be reduced from PLO to PS per share Shareholders’ equity consisted of ‘Share capital pur vluo P10 per share ithoviaed osu and outstanding £50000 sharee SSarepremium Retained earning (bc) 4. The resulting deficit balance isto be offset against the share premium. Required: a Prepare journal entries to give effect to the ', Present the shareholders equity aftr the reorganizationProblem 17-24 (IAA) Subic Company he several years, sulfloredsubatanial operating ossee for The entity’ ability to service its debts and pay operst expenses has been impaired renting Consequently, the owners, and creditors have decided to execute a quasi-reorganization, ‘The statoment of financial position of Subie Company on December #1, 2013 prior to the reorganization is ae fallow: ‘som os ssn ra a — a cece =r = rane ous LIABILITIES AND SHAREHOLDERS EQUITY Acsuntpayale 1300000 Necpanaie reteprable saongo0 Orsay tare cas PIG0 par, S000Dsharee 8 Suasepe ‘000 Retsined oni "Total ishilin and sharcbolders’ eity 2300000) 840 » 1 following information may beer on seccunting for the guasicroorganization ‘An independent appraisal of the obsolete and worthless. Bquipment costing P2,000,000 and with accumulated depreciation of 1,200,000 is expected to be sold for Required: ntity’s inventory feveals goods with carrying amount of P160,000 to be 300,000 However, the holder of the note payable agrees to accept the equipment in full satisfaction of the note ‘The goodwill is to be written off as loss ‘The mortgage holder agrees to accept 40,000 new preference shares with P1OO par value in satisfaction of the Labi ‘The per value ofthe ordinary share ia reduoed to P20. ‘The resulting deficit i offeet against the share premium. Prepare journal entries to give effect to the quasi- reorganization, Prepare a statement of financial position immediately after the roorganizationProblem 17-25 (AA) ‘The following reorganization is proposed, whichis approved by shareholders to be effective on Decomber 31, 2013 for Bacolod Company. 1. The preference share capital isto be exchanged for ‘P2,000,000 of 10% debenture bonds, eet fe Goodwill isto be writien off ‘The property, plant and equipment are appraised by independent por nu replacment cnt of 12000, e SEC approved the revaluation ofthe property, past and equpmont to give offet tothe rearennieaton 4 Tho renting deft tb ofet nua he revaluation ‘The statement of financial postion on December 31, 2013 i: = = es SB Peace ee eaten ie _ =a sma 1 Prepare journal entries to give ‘effect to. th roorganteation on Dasemboe 81, 2013, 2 Prepare a statoment of fnancil postion on December 81,2018 afer the reorganization 342 Problem 17-26 (AICPA Adapted) Gyan Company iscuod share capitel of 20,000 shares with PS par at P10 per share. On January 1, 2013, the retained ‘earnings were P300,000 In March 2013, the entity resequired 15,000 shares at P20 per share. In Juno 2013, tho entity sold 1,000 of these shares to its corparate fliers for P25 per share. The cost method is used to record treasiry shares [Not income for 2013 was P60,000. ‘On December 31, 2013, what amount shouldbe reported as unappropriated retained earnings? 280,00 - 365000, 315,000 360,000, Problem 17-27 (AICPA Adapted) 0. t ¢ East Company acalondar your entity, had suficiont retained ‘earings in 2013 asa basis for dividends but was temporarily short of cach, "The entity dolarod a dividond of P100,000 on April 1, 2013, and issued promissory notes to ita shareholders in lieu of| aah, "The notos, which wore dated April 1, 2013, had a matuety date of March 81, 2014 and a 10% interest rat, How should, the serip dividend and related interest be ‘counted for? ‘a. Debit retained earnings for P110,000 on Apeil 1, 2018. 1. Debit retained earnings for P110,000 on March 31, 2014, €:- Debit retained earnings fr P100,000 on Apri I, 2013 and debit interest expense for P10,000 on March 31, 2014, 4 Debit retain earnings for P100,000 on April 1, 2013 and Aebit interest expense fr P7,500 on December 81, 2013. ¢ 4aProblem 17-28 (AICPA Adapted) Jn 2018, Elm Company bo se of B00808 Oe Scared raery aiden oft frog on etrunry 2014 papa cu Pencuaeg i abd ‘Tho Out stock hod the following market value December 1, 2013 250,000 December 31,2013 260,000, February 16,2014 240,000, What is the net charge of the property dividend against retained earnings during 20139 2. 200,000 & 2aoto00, 350,000 360,000 Problem 17-29 (IAA) a. Lauretta Company's shareholders equity on January is follows: oad ° 2013 Share capital 1800000 Share premium S000 Retanedesrings 200.000 ‘The entity had 400,000 authorized shates of PS par value, of hich 300 000 shares were sesued and outstanding, On dase $2 2018 theentyaequro 80,000 care or FLO pr abr o as teasuy. The shares were originally issued af P Ber share. The cont method i used to aeoount for teasury On November 1, 2013, the entity declared and dsteibuted a property dividend of taventory payable on July 1, 2014: The inventory had a P750,000 carrying amount anda PO00.000 li yal on Navenber 1 2013 Tovey ad a nt ale @ jon Deoember 31, 2013, and PO00,000 cn duly 1, 2018 ‘The net income for 2013 was P2500 What amount should be reported as retained exrnings on December 31, 20139 ae BBR Be 7 BES mapproprinted Problem 17-30 (AICPA Adapted) Cash dividends during 2013 on the P10 par value share capital of Ray Company were as follows: dod guartr 0000 Srdquaree 1.000000 Sthguarer ‘o.c00 ‘The 4th quarter cash dividend was declared on December 20,2013 to shareholders of record December 1, 2018 payable fon January 31, 2014. Tp addition, the entity declared a 5% Stock dividend on December 1, 2013 when there were 300,000 heres issued and outstanding and the market value was U0 per share on declaration date and P28 on diateabution date! The shares were Sstued on December 21, 2013, What was the effect on shareholders’ equity accounts rol of tho dividend transactions? Share Share tained oa pecan pom = tow ‘ro 3800400 de Tom ets sapom ard «(M0008 deh Gp site seat bine cea ‘tooo dete Siasoo Suit Sgotoo Seat SAGES Sb Problem 17-91 (AICPA Adapted) Franta Company was authorized to issue share eapital of 100,000 shaves with ueon January 1. 9013, Eighty thousand shares were cold dung Tie HEFT Fear at P50 per share and. 000 shares were later rescquised as treasury at G5 per share, A chare spht of 6 for 1 wae approved on December 91,2018, On January 1, 2014, 10% stack dividend was paid and on March 1, 2014, the treasury shares were Felscued et POS per share What isthe number of sharep issued and outstanding on ‘March I, 20147 418000 (38000 40,000 4 s2z000Problem 17-32 (PHILCPA Adapted) Dayron Company had 80,000 ordinary shares outstanding in January 2013. The entity distnbuted a 15% stock dividend in March and a 10% stock dividend in June. After acquiring 10,000 shares of treasury in July the entity split ca share for 1 in December. How many ordinary shares are outstanding on December 31, 2013? 364,800 ‘88.000 ©. 498,000 4. 451,500 Problem 17-83 (AICPA Adapted) Rudd Company had 700,000 ordinary shares authorized and 300,000 shares outstanding on Januaey 1, 2018, January 81 Declared 10% stock dividend une” 30 Purchased 100,000 shares ‘August 1 Relasued 50,000 shares November $0 Declared 24or-1 ahare eplit On December 31, 2013, how many ordinary shares are outstanding? 60,000 Problem 17-34 (AICPA Adapted) Ray Company declared a 5% stock dividend on ita 100,000 issued and outstanding chares of P20 par value, which had fair value of P50 per share bafore the stock dividend was declared. This stock dividend was distributed 60 days afar the declaration date. What ie the increase in current Tables as'a result of the stock dividend declaration? 250,000 & 100,000 150,000 6" 346 Problem 17-85 (AICPA Adapted) ace Company declared and datebted 10 stock dividend Sete commen’ oP 600000 and par value of P.000 000, SEPA sol dltdond wit fir val of 390,000 and fae of 75.00,000, What aggregate aroun shouldbe ital fo retained eaouings fr the stock dividends? . 4500,000 isare wy B 3s00000 Gate ar ‘00,000 A" $300,000 Problem 17-86 (AICPA Adapted). @, (On May 31, 2013, $l Company’s boar of directors declared STON stock dividend, The market price of the 30,000 Sutstanding sheres of P20 par value was 90 per share on Ghat date The stock dividend was distabuted on July 31 Bb15 when the share market price wae P100. What amount should be credited to share peomium forthe stock dividend? lvidend. ‘The market value per share Gelaration was F100, The shareholders’ equity before {Souance of the share dividend was as follows Sharocapitl, P100 yar, 20000sharesoutstanding 200000 Shae prem Sooo. Retained earings e000 ‘What ig the retained earnings balance immediately after the hare dividend? vaoeee 1,300,000 + 500,000 2 100,000 “900,000 a7Problem 1738 (ACP) On June 30,2013, when the entitys share was seling at P40, ‘the capital accounts were as follows: ‘Share capital par P25, thorized 160,000 shares, 18,0 sharw isoud of which 8,000 shares, Retained 1.375.000 ined earings x ‘Treasury shaves, at cost conn IE 100% stack dividend mere declared and tht all he tresury hares were need ate idan aed he balance trom the uated shases, how muck ein ‘strings shouldbe eqptlced? ‘1.250000 1,800,000 (6) 1.215.000 1128.00, Problem 17-99 (CGAC) q, The directors of Ontario Company whose P50 par value share ‘capita i currently selling at PO per share have decided t9 isoue a stock dividend. The selling prioe is not expected to be affected by the stock dividend. The entity, which haa en ‘authorization for 1,000,000 shares, had issued 500,000 shares of which 100,000 shares are now held as treasury 1m order to capitalize P2,400,000 of the retained earnings Fatanc, what parentage shold be decal as no dividend by the directors? “ * 10%- 3% em a 4% 48 Problem 17-40 (IAA) ‘The shareholder! equity of Katrina Company on January 1 2018 contained the flloving accounts: ‘Share capital, 250,000 shares authored: oof nested snout 000000 sunpreeiua ‘onto fikvemne Scene ‘The board of directors declared a 10% dividend on April 1, 2DIa when the market vale ofthe share was P70. The stock dividend wae ioued on July 1, 2013 when the market value ‘of te share was P100. The share has par value of P50. The Sotity sustained a net lose of P1,200,000 for 2019, ‘What amount should be reported as retnined earnings on December 31, 20137 G 6,100,007 6 500,000 | ‘& 8,080,000 Problem 17-41 (TAA) g. ‘The following data are extracted from the shareholders! foquity of Kiara Company at year-end: copia pionperva) $000 gHown Semseangimerre) — 3etngg) Reo Sate SR ° ycing 2014, the entity declared and pai cash dividend of i501 and alo declared and insued a stock cvidend. There trove gocher changes in shares fsyed end outstanding during JOT." net income fr 2014 was 1,600,000, What amount should be reported as retained earnings on December 81, 2014? 5,250,000 + 5760.00 © 5,680,000 600,000 49Problem 17-42 (PHILCPA Adapted) a. Beaux Company provided the following information: reloenoe shar capital. P500 pr vals, 2200 shares ‘Treasury preference shares, 100 share tase, Ordinary thare capital ao par, 3.000 share Retained carnage 1.100.000 ‘The Board of Directors resolved to pay a 100% stock dividend. on all shares outstanding capitalizing emounts of retained earnings equal to the par value and the lasue price of the preference and ordinary shares outstanding, seapectvely ‘and thereafter to pay a cash dividend of 10% on preference share and a cash dividend of PIO per ordinary share. What 4s the otal sharebolders equity aftr efectng the dividend ‘8. 4,090,000 b 3310,000 3.820,000- 83,986,000, Problem 17-43 (IAA) On January 1, 2013, Coleen Company hed 220,000 PS par value shares outstanding. On June I, the entity acquiced 20,000 shares to be held in the treasury. On Decomber ‘when the market price of the share was P20, the entity declared s 10% share dividend to be issued to shareholders ‘of record on December 16, 2013. What was the impact of the share dividend on retained earnings? 18, 100,000 decrease 400,000 decrease $40,000 decrease No effact Problem 17-44 (IAA) 0 Elvis Company reported the following shareholders’ equity * on January 1, 2013 ‘Shar capital, par, 600,000 chars authorized, 700,000 saree evedandoutstending 1,000,000 ‘Sharepremisin| 00.000 2.00000 On January 31,2018, the entity reacqured 10,000 shares at PaO per share to be held aa teeasury- On July 1, 2012, the entity declared and issued « 30% stock dividend. On December 41, 2013, the entity declared and paid cash Gividend of P20 per ahare. The net income for 2018 was 3,000,000. What isthe unappropriated balance of retained learnings on December 31, 2013? 2,745,000 7 5046, 000 | ©. 3,700,000 2,600,000, E - Problem 17-46 (LAA) “The shareholders‘ equity of Gem Company on January 1, 2013, wae ae follows: ‘are capital, P20 par, authored 200000 shares, "Teun and cutsanding 100. 000sharer 2.000.000 ‘Sarepremtum 000 000 Retuinedoarasngs 300.000 (On March 1, 2013, the board of directors declared 15% share dividend, and accordingly 16,000 additional shares ‘were iasued. On March 1, 2013, the fair value ofthe share ‘Mas POO. The entity sustainod net lose of P1,000,000 The current year. What amount should be reported retained earnings on December 81, 2013? @ $5,600,000 200,000, + 6,600,000 & 7200000 851Problem 17-46 (PHILCPA Adapted) ¢. Cerritos Company began operations on January 1, 2010, Daring the first three years of operations, Cerritos Company reported notinoome af 800,000 fr 2010, P2, 600,000 for 201 ‘and P9,000,000 for 2012. The entity alzo declared and paid dividends ofPI,000,000 for 2011 and P1,000,000 for 2012. The following data relate to 2013; Income before income ta 44500,00 Por period adjatment~understatement ‘£2011 depreciation baer tax 00.000 ‘Cumulative decease im ncome fo change {iminrontory method before tax ‘00.000 Dividend declared (of thie amount, 00,000, ‘willbe paid on January 12014) 2.000.000 Income taxats| 0% What amount should be reported as retained earnings on December 31, 20137 4,890,000 ~ 5.450.000 ©. 6,000,000 5,650,000 Problem 17-47 (IAA) At the beginning of 2013, Flash Company had retained ‘earnings of P4,000,000, During the year, the entity reported ‘net income of P2,000,000, sold treasury shares at a “gain” of 720,000, declared a cash dividend of P1,200,000, and declared sid insued a small share dividend of 60,000 shares With P10 par value when the fair value ofthe share was P20, ‘What is the amount of retained earnings avellable for Aividende at the end of 20137 & s9mec0 ‘ ‘200,000 43300000 +4920,000 352 Problem 17-48 (IAA) Nam Company reported the following amounts in the shareholders equity on January 1, 2013 Preference sare capital P150 aval, 20,000 shares 3,000,000 rina sare cpa P50per vai, 100800chars 003000 Racsad earings $500,000, ‘On January 1, 2013 the entity sold 2,000 additional ordinary Shares fr POO per share, Late in 2019, was eared thet Tecause of mathematical error, an overstatement of Aspreintin expense by P500000 had ooxurred in 2012. The ny reported het income of P4000 000 for 2018" ‘The entity ‘tarantino P.000 on preenesare snd ‘000000 en ordinary shares during 2013 The income tax rate 2m Whet aon shold be rpored oe etained earnings fon December 31, 20137 5,850,000 7 Problem 17-49 (IAA) On December 81, 2013, the shareholders equity of Kremlin Company was as fellows: capital, P80 parvaoe 3,000.00 Sarepemiin 20,000 Reaoederaing. 4300000 ‘A.16% share dividend was declared and distributed on December 31, 2019 when entity's shere was selling at PS. What amount should be reported ae share capital outatanding? 858Problem 17-50 (PHILCPA Adapted) On January 1, 2018, the equity of Albay Company consisted of 10% cumulative preference share capital P100 par 2,000,000, ordinary share capital PS stated value 'P5,150,000, sharo premium P3,500,000, retained earnings 'P4.000,000, and treesury ordinary shares P400,000, (On January 15, the entity formally retired all the 20,000 treasury shares. The treasury shares were acquired in ‘January 2012. The shares were originally sued at PLO per share, The entity owned 10,000 shares of Digos Company purchased in 2012 for P800,000. The Digos ahares were included in the ‘entity's noncurrent equity securities, On December 31,2013, the entity declared a dividend in kind of one share of Digas for every hundred ordinary shares held by shareholder ‘The fair value of Digos share is P90 on December 31, 2013, ‘Tho dividond in kind was disteibuted on Match 15, 2014, when the fair value of Digos share in P100, ‘On December 12, 2013, the entity declared the yearly cash dividend on proforence share, payable on January 16, 2014, On January 15, 2014, before the accounting records were ‘losed for 2013, the entity became aware that rent income for the year ended Decomber 31, 2012 was everstated by 1,000,000. The aftertax effect on 2012 net income was 'P700,000. After correcting the rent income, net income for 2018 wes P3,000,000. What amount should be reported. as retained earnings on December 31, 2013? 5,000,000 G s100.000- 620,000, 4. 400.000, 854 Problem 17-51 (AICPA Adapted) On January 1, 2014, the board of directors of Blake Company Aleclared a cash dividend of P8000 to shareholders of record on January 15, 2014, and payable on February 15, 201d. Selected data on December 31, 2018 are as follows: Stare capital 19.00,000 Shae presiae .000| Retained earning Decombor 31,2018, 0 “ December3 a? [Netincome for 2018 What amount should be reported as liquidating dividend? Poa ae 688. ee Problem 17-52 (AICPA Adapted) 0. on danury 1, 2018, Bale Company roped 700.00 ot Sppropriaed retained earnings forthe contruction of new SHls bung which wae competed in 2013 a otal ot of 1,500,000. in 2013, the entity appropriated P1,200,000 of Fetained earnings forthe constracton of «new plant: Also, ‘000,000 ofcash was wetrcted forthe retirement of bonds posable dus in 2018 In the Dooember 31, 2013 statement of financial postion, ‘what amount should be reported ns appropriated retained (>) 1,200,000 7 1450,000 ©. 2950,000 4. 3,200,000Problem 17-58 (AICPA Adapted) 0 ‘he ghareholders! equity of Brown Company on December ‘2018 consisted ofthe dooming my ‘= ‘Shar capital P50 pa, 10,000 shares outatanding Share prt 00.000 Retaned earnings fc v0.90) (On December $1, 2013 the entity put into efit a sharhalder smapeed ne sega yg te prvale e godeliminatine the deficit sgainet shay Tae 29 Irnmediately after qunsreorganisston wit neeee SC roported as shale poe a 1,500,000, & ‘Boom - 000,000 & “e00;000 Problem 17.54 (AICPA Adapted) Gaston Company has sustained heavy loses over a period of time and conditions warrant that the eatiey aferina ‘undergo a quasicoorganization on December 31° Sots Inventory with cost of P6,500,000 was recorded on Docomber 31, 2019 at ita market value of P6000 056 Property, piant and equipment were recorded on December’ St, 2013 at P12,000,000, net of accumulated depreciation. The sound vaiue was P8000 000, On December 21, 2018, the share capital ie B7,000,000 ‘onsiating of 700,000 aharea with par value of Flore, ‘hare premium is P1,600,000, and te deficit in retained ‘sarnings is P300,000 ‘The par value ofthe share is tobe reduced from P10 to Tmmediatl arth quasirerganizaon, what ithe shareholders’ equity? meenzaton, a 9.309000 F 3.700.000 - «200,000 Problem 17-58 (AICPA Adapted) Moga Company provided the falowing information: + Dividends on 1,000 cumistivepefeense shares of 6% igh pr vale have nt ben declared pid 3 ear + Treas shares mero aoquired a a cost of PI,800,000, The ‘Teury chase ha ot been teased a of year-end What amount of retained earnings should be appropriated? Problem 17-56(IAA) a. rant that ‘Adverse financial and epratng circumstances warrant that lid Company should undergo m quas-reorganieation on December 31, 2013. The following information may be ‘elovant in adtunting forthe quan organization * aventory with a fair valu of P2,00,000 is currntty {Rosell nthe scant a ts ept of 8,900,008 + itanet wha aur f 0,00 are crey Feerded a 830000 net of scumlatedSepeciton + Tea shartare conta P00 oct {onl ciao facta the reorgantaaton. No Shes re ued ° + Thebes val ofthe share i reduced fom P25 oP. Immediately before these events, the shareholders’ equity appears as follows Sharecapital Peper, 100000chaeroutaanding 2400000 Reco cemings Ges) 2.000000) jon, what amount should be 887Problem 17-57 (AICPA Adapted) On January 1, 2013, Rama Company had 20,000 treasury shares of PI par valwo that had boon acquired in 2012 st P12 per share. In May 2013, the entity reissued 16,000 of these {roasury shares at P10 per share. The cost method is used to ‘ecord treasury transactions, On December 31, 2013, what amount should be reported in the notes to financial jatomonts as a restriction of retained earnings a8 a result of the treasury share transactions? 25.000 eae 10,000 ee comme oo Problem 17-58 (AA) Q. Christelle Company has incurred heavy losses since its inception. The board of director voted to implementa quasi- reorganization, subject to approval of shareholders, Immediately prior tothe restatement on December 31, 2013, the shareholders equity was ae fllowe: Share capita, P100 par, 600000 shares 0.000.000 ‘Share premium 5.000.000 Retained earnings (ait) (8000.00) ‘The shareholders approved the quasi-reorganization to be accomplished by a reduction in inventory of P2,000,000, a reduction in property, plant and equipment of P4,000,000, ‘wrteoffof goodwill of PI, 000,000 and appropriate adjustment to the capital structure against share premium frst and any romaining deficit against the share capital account, To implement the quasi-reorganization, the share capital Account should be reduced by what amount? @ 10,000,000 7 15,000,000, ©. 20,000,000 43,000,000 Problem 17.59 (AICPA Adapted) Jade Company showed the following shareholders’ equity" fon January 1, 2013, ‘Share caitl 150,000 shares 1.500000 Share premium 000000, Retained carngs 100000 ‘Treavury shares, 100,000 at ost «se0000) All of the outstanding and treasury shares were originally {ued in 2011 for PIL per share. The treasury shares are reacquired on March 31, 2012. During 2013, the following vents or transactions occurred relating to shareholders! auity ‘February 15 ~Teeued 400,000 shares for P12.50 per share. b, June-18— Declared a cash dividend of PO.20 per share to Shareholders of record on April and payable on Apel 15. Thin was the fire dividend ever declared ©. September 15 - The president retired. The entity purchased from the retiring president 100,000 shares for 13.00 per share which was equal to market value on this date, These shares were canceled 4. December 15 — Declared a cash dividend of PO.20 per share to shareholders of record on January 2, 2014, and payable on January 15, 2014 ©. On December 31, 2013, the entity i being aued by two separate partios for patent infringement. ‘The management and outside legal counsel share the following opinion regarding these suit: elihood stimated Suit * oftosing the suit Tos a Reasonably posible 2000 m Probable sa000 8591. What io the inerease in share premium arising from th inauance of 100,000 sharea on Fobra, ag0 4,000,000 5 5,000,000 ‘$600,000 2 What is the decroase in share premium arising from the rutirement of 100,000 shares oa Sentenke 100,000 The entity decided to appropriate retained earnings for all lose contingencies that are not properly aeanatie' Se a, chargo to expense. How much of lon continee sie, should be appropriated by a charge to unaseeemet retained eating 1,000.000 Ce "seo's00 ‘ea.oo0 aoo.o00 amount of cash dividend should be charged against inappropriated retained earnings in 2013" és0.009 360,000 4.000 5. What amount should be reported in the notes to financial statements as restriction on retained earings wan of acquisition of treasury sharea? 200,000 900,000 300,000