On May 2020 GSW was organized with 3,000,000 authorized shares of P10 par value ordinary shares, and 300,000 of its ordinary shares were issued for P3,300,000. Net income through December 31, 2020 was P125,000.On July 23, 2021, when the shares were selling at P13 per share, GSW issued 500,000 of its ordinary shares in exchange of a real estate properties which were fairly valued at P6,250,000. A 5% share dividend was declared on October 2, 2021, to shareholders of record on October 23, 2021. The market value of the ordinary shares was P11 per share on the declaration date. GSW net income for the year ended December 31, 2021 was P350,000.During 2022, GSW had the following transactions:In February, GSW reacquired 15,000 of its treasury shares for P12 per share.In June, GSW sold 15,000 of its treasury shares for P12 per share.In September, each shareholder was issued (for each share held) one right to purchase two additional ordinary shares for P13 per share. The rights shall expire on December 31, 2022.In October, 250,000 share rights issues were exercised when the market value of the ordinary shares was P14 per share.In November, 400,000 share rights issues were exercised when the market value of the ordinary shares was P15 per share.On December 15, GSW declared its first cash dividends to shareholders of P0.30 per share, payable on January 10, 2023, to shareholders as of record on December 31, 2022.On December 31, GSW retired 10,000 of its treasury shares and had them reverted on an unissued basis. The market value of the ordinary shares was P16 on this date.Net income for 2022 was P800,000. Question 1: The cash dividends declaration on December 15 includes a debit to retained earnings ofGroup of answer choices637,500351,000639,000349,500Question 2: What is the adjusted share premium account?Group of answer choices3,585,0005,505,0003,595,0005,545,000Question 3: What is the adjusted retained earnings balance?Group of answer choices485,500197,500196,000484,000Question 4: The total shareholders’ equity as of December 31, 2022 is?Group of answer choices27,042,50014,467,50014,422,50026,997,500

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Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 5MC: Kent Corporation was organized on January 1, 2014. On that date, it issued 200,000 shares of 10 par...

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On May 2020 GSW was organized with 3,000,000 authorized shares of P10 par value ordinary shares, and 300,000 of its ordinary shares were issued for P3,300,000. Net income through December 31, 2020 was P125,000.

On July 23, 2021, when the shares were selling at P13 per share, GSW issued 500,000 of its ordinary shares in exchange of a real estate properties which were fairly valued at P6,250,000. A 5% share dividend was declared on October 2, 2021, to shareholders of record on October 23, 2021. The market value of the ordinary shares was P11 per share on the declaration date. GSW net income for the year ended December 31, 2021 was P350,000.

During 2022, GSW had the following transactions:

In February, GSW reacquired 15,000 of its treasury shares for P12 per share.
In June, GSW sold 15,000 of its treasury shares for P12 per share.
In September, each shareholder was issued (for each share held) one right to purchase two additional ordinary shares for P13 per share. The rights shall expire on December 31, 2022.
In October, 250,000 share rights issues were exercised when the market value of the ordinary shares was P14 per share.
In November, 400,000 share rights issues were exercised when the market value of the ordinary shares was P15 per share.
On December 15, GSW declared its first cash dividends to shareholders of P0.30 per share, payable on January 10, 2023, to shareholders as of record on December 31, 2022.
On December 31, GSW retired 10,000 of its treasury shares and had them reverted on an unissued basis. The market value of the ordinary shares was P16 on this date.
Net income for 2022 was P800,000.

Question 1: The cash dividends declaration on December 15 includes a debit to retained earnings of

Group of answer choices

637,500

351,000

639,000

349,500

Question 2: What is the adjusted share premium account?

Group of answer choices

3,585,000

5,505,000

3,595,000

5,545,000

Question 3: What is the adjusted retained earnings balance?

Group of answer choices

485,500

197,500

196,000

484,000

Question 4: The total shareholders’ equity as of December 31, 2022 is?

Group of answer choices

27,042,500

14,467,500

14,422,500

26,997,500

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