Reference no: EM132749944
Question - The shareholder's equity of Gazelle Co. on December 31, 2019 shows the following balances:
Preference share, 12% P100 par P1,000,000
Ordinary share, P100 4,100,000
Subscribed Preference share 200,000
Subscription receivable-Preference 50,000
Share Premium-Ordinary 2,000,000
Retained Earnings 3,000,000
Preference share treasury shares (2,000 shares) 250,000
Ordinary share treasury shares (1,000 shares) 125,000
Dividends have not been paid for 2 years (including the current year)
Required - Assume that 80% of the retained earnings are available for distribution as cash dividend.
Compute for the dividends per share under each of the conditions with respect to preference share:
1. Noncumulative and nonparticipating.
2. Cumulative and nonparticipating.