Reference no: EM132825986
Problem 1 - Given the shareholders' equity section of the Flores Corporation's statement of financial position below, what is the book value per share for both the preference and the ordinary shares?
Shares Capital Preference Shares - P100 per share, 8% cumulative, 10,000 shares authorized, 500 shares issued and outstanding* P50,000
Ordinary Shares - P10 par, 100,000 shares authorized, 40,000 shares issued and outstanding P400,000
Share Premium - Ordinary 516,000 916,000
Total Share Capital P966,000
Retained Earnings 275,000
Total Shareholders' Equity P1,241,000
*The preference shares has a liquidation value of P104 per share, and current year's dividends are in arrears.
Problem 2 - Domingo, Inc. was organized on January 2 with the following capital structure:
10% Cumulative Preference Shares. par value P1,000 and liquidation value P1,050; authorized, issued and outstanding 1,000 shares P1,000,000
Ordinary Shares, par value P250; authorized 100,000 shares; issued and outstanding 10,000 shares 2,500,000
Domingo's profit for the first year ending December 31 was P4,500,000, but no dividends were declared.
Required -
1. What is the book value per preference share at December 31?
2. What is the book value per ordinary share at December 31?
Problem 3 - Lusterio Corporation's ordinary share is currently selling on a stock exchange at P170 per share, and a recent statement of financial position showed the following information:
Shareholder's Equity Preference Shares, 5%, P? par value, 1,000 shares authorized, issued and outstanding P100,000
Ordinary Shares, P? par value, 4,000 shares authorized, issued and outstanding 160,000
Retained Earnings 300,000
Total Shareholders' Equity P560,000
Required -
1. What is the market value of the ordinary shares?
2. What are the par values of the preference shares and ordinary shares?
3. If no dividends are in arrears, what are the book values per share of the preference and ordinary shares?
4. If two years' preference dividends are in arrears, what are the book values per share of the preference and ordinary shares?
5. If two years' preference dividends are in arrears and the preference shares has a liquidation value of P110 per share, what are the book values per share of the preference and ordinary shares?