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Compute for the interest on bonds payment

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Question : RST Corporation 's EBIT for 2016 amounted to P200,000. The company's capital structure consists of 100, 15%, $5,000par value bonds; 1,00012% preferred shares, P100 par value; and 2,000 50% ordinary shares, $50 par value. Retained Earnings account has a balance of $ 125,000 as of December 31, 2016. Forty percent of earnings after interest and taxes (corporate tax rate - 32%) will be retained in the business.

Problem : Compute for the following:

a) Interest on bonds payment - $75000

b) Corporate income taxes - $ 40000

c) Dividends on preferred shares - $ 12000

d) Dividends on ordinary shares - $ (Please help me with this)

e) Balance of Retained Earnings Account as of December 31, 2016 - $ (Please help me with this)

Reference no: EM132469447

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