CASE 1: STOCK DIVIDENDS
On January 1, 2019, the records of the Gerald Anderson Corporation showed these balances:
Common stock--authorized 78,000 shares at P100 par;
issued 30,800 shares ................................
Paid-In capital in excess of par ......................
Retained earnings .....................................
P3,080,000
264,800
2,960,000
During 2019 and 2020, these transactions occurred:
July 1, 2019
June 1, 2020
Declared stock dividend (from unissued stock) of 1 share for each 2 shares
outstanding, issued September 1. (Prior to the declaration, the market value of
the unissued stock was P115 per share.)
Declared stock dividend (from unissued stock) of 1 share for each 10 shares
outstanding, issued August 1. (Prior to the declaration, the market value of the
unissued stock was P120 per share.)
Provide the entries to record the declaration and payment of the stock dividends during 2019 and 2020.
CASE 2: CASH DIVIDENDS
During 2019, the following transactions related to the capital stock of the Peregrine Corp. occurred:
Jan. 7
Feb. 7
March 4
March 18
July 9
Sept. 10
Sept. 18
Declared a P.75 cash dividend on 150,000 shares of preferred stock.
Paid dividends on preferred stock.
Declared a P.50 cash dividend on 200,000 shares of common stock with a P20 par
value.
Paid dividends on common stock.
Purchased 12,000 shares of Peregrine's own common stock at P32 per share;
acquisition recorded at cost.
Declared a cash dividend of P.40 per share on common stock outstanding.
Paid dividends on common stock.
Provide the entries to record the above transactions.
CASE 3: PREFERENCE SHARES
Brenda Company paid cash dividends totaling P150,000 in 2018 and P75,000 in 2019. In 2020, Brenda intends
to pay cash dividends of P800,000. Compute the amount of cash dividends per share to be received by
common stockholders in 2020 under each of the following assumptions. Treat each case independently.
There were no dividends in arrears as of January 1, 2018.
(1)
(2)
(3)
25,000 shares of common; 100,000 shares of 6 percent, P50 par cumulative
preferred.
25,000 shares of common; 50,000 shares of 6 percent, P50 par noncumulative
preferred.
25,000 shares of common; 70,000 shares of 6 percent, P100 par cumulative
preferred.