MQ3 - RETAINED EARNINGS.docx - 1 2 3 4 5 Give the pro-forma...

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1. Give the pro-forma journal entry to record declaration of liquidating dividends. 2. When is liability for dividends recognized by a corporation? 3. Are subscribed shares entitled to dividends? (yes/no) 4. Give the pro-forma journal entry to record the declaration and 5. issuance of bonds as dividends. 6 to 22 are based on the following Assume the following shareholders equity for ABC Corp. Share Capital –P- 100 par, 10,000 shares issued of which 1,000 shares are in treasury -P- 1,000,000 Subscribed Share Capital 2,000 shares -P- 200,000 Less: Subscription Receivable (100,000) 100,000 Retained Earnings : Unappropriated 250,000 Appropriated for TS 110,000 Appropriated for Sinking Funds 50,000 ______ 410,000 TOTAL -P- 1,510,000 Less: Treasury Shares, at cost 110,000__ Shareholder’s Equity 1,400,000 6. How much is the maximum dividend that can be declared? 7. What kind of appropriation is the appropriation for treasury shares? 8. What kind of appropriation is the appropriation for sinking fund? 9. Entry(ies) on the date of declaration and date of payment if the board 10. Of directors declared a 5% cash dividend.
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