Reference no: EM132831611

Question - Yew Company had the following balances on December 31, 2010 12% non-participating, non-cumulative preference share Capital, par value of P100, 10,000 shares 1,000,000 10% fully participating, cumulative preference share capital, par value of P100, 25,000 shares 2,500,000

Ordinary Share capital, par value of 100, 75,000 shares 7, 500,000

The entity plans to declare cash dividends. it has not paid cash or a stock dividend before. There has been no change in the capital balances since spend started operations of five years ago.

The entity reported the following net income and loss for the five years of operations.

2006 1,500,000 loss

2007 1,000,000 loss

2008 500,000 loss

2009 1,750,000 income

2010 6,250,000 income

If the maximum amount available for dividend on December 31, 2010 is declared and paid how much should be distributed to the ordinary shareholders?