Reference no: EM132903386

Nevada Square has the following selected accounts in its shareholders' equity section as of December 31,2019:

Preference shares, P100 par 10percent cumulative,

100,000 shares issued and outstanding P10,000,000 Ordinary shares, P20par, 1,000,000 shares authorized,

700,000 shares issued and outstanding 18,000,000

Share premium 8,000,000

Accumulated profits 30,000,000

There are no dividends in arrears on the preference shares. During 2020, the following transactions occurred:

a. The board of directors declared a cash dividend totaling to P2,800,000 to be paid to preferenceand ordinary shareholders. Later, a share dividend of 100,000 ordinary shares were declaredon ordinary shares.The market value of ordinary shares is P68 per share on the date the share dividends were declared.

b. Sometime after the above dividends were declared and settled, the board of directors declaredas property dividends one shares of its investment in Bingo Corp. stocks being held by thecompany as trading securities for every two ordinary share outstanding.Bingo Corp. stockswere originally purchased by the company at P12 per share and have a carrying value basedon their fair value as per the last remeasurement (balance sheet) date, at P20 per share. Bingo Corp. shares were selling at P24 when the property dividends were declared and wereselling at P25 when the property dividends were settled.The company had a total of 500,000 shares of Bingo Corp. shares.

c. At the end of 2020, the board declares a four-for-one share split.With the split, the number ofordinary shares authorized to be issued increased to 4,000,000.At the date of the share split,the market value of ordinary share is P75 per share.

d. Net earnings during 2020 total P6,000,000.

REQUIRED:

Problem 1: What is the adjusted balance of the company's Accumulated profit account at the end of year? *COMPUTE

A. 18,400,000

B. 21,600,000

C. 26,400,000

D. 16,400,000

Problem 2: What is the balance of the ordinary shares account as of December 31, 2020? *COMPUTE

A. 16,000,000

B. 14,000,000

C. 20,800,000

D. 18,000,000

Problem 3: What is the balance of the share premium account as of December 31, 2020? *COMPUTE

A. 8,000,000

B. 12,800,000

C. 14,800,000

D. 10,800,000

Problem 4: What is the adjusted balance of the company's Shareholders' equity account at the end of the year? *COMPUTE

A. 57,200,000

B. 60,400,000

C. 55,200,000

D. 54,400,000