Real Razel company's capital structure at January 1, 20A was as follows: Shares issued and outstanding for Ordinary share capital, 400,000 and for preference share capital, 100,000. On October 1, 20A, Real Razel issued a 10% share dividend on its ordinary share, and paid annual cash dividend of P400,000 on its preference share. The preference share capital is noncumulative, nonparticipating and nonconvertible. Net income for the year ended December 1, 20A was P3,840,000. What amount should be reported as basic earnings per share? CHOICES: 8.20 8.72 9.36 7.82
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Real Razel company's capital structure at January 1, 20A was as follows: Shares issued and outstanding for Ordinary share capital, 400,000 and for
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8.20
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8.72
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9.36
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7.82
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Solved in 3 steps
- Question 1 The following information relates to a company listed on Luse- Mungwi PLC ZMK Issued share capital (1000 shares) Share premium. Reserves. Share holders funds. 6% Irredeemable Debentures. 9% Redeemable Debentures. Bank loan. Total Long Term Liabilities. Million 4 000 2 600 290 6,890 2,800 2,900 1 000 6 700 The current cum interest market value per k100 units is k103 and k105 fir the 6% and 9% Debentures respectively. The 9% Debenture is redeemable at par in 10 years time. The bank loan bears interest rate of 2% above the base rate (current base rate is 15%). The current ex-div market price of shares is k1, 100 and a dividend of K100 per share which is expected to grow at a rate of 5% per year has just been paid. The effective corporation tax rate for Mungwi is 30%. Required: A) Calculate the effective after tax weighted Average Cost of Capital (WACC) fir Mungwi PLCQUESTION 2Naruto Bakery has a capital structure consisting of:42,000 issued and paid-up ordinary shares RM105,0005,000 issued and paid-up 10% Preference shares RM15,0008% Bonds (10-year maturity) RM30,000The balance of retained earning as at 1 January 2021 was RM75,000. The market priceper unit of the company’s financial instruments are as follows:Ordinary shares : RM2.50 (last dividend paid was RM0.50; growth rate is 5%Preference shares : RM3.008% Bonds : RM890.00 (par value RM1,000)The company is considering to invest in new project worth RM80,000. The floatationcost to sell more shares and bonds are 5%. The corporate tax rate 25%.You are required to calculate (show all workings):b. The company’s cost of debt, preference share, retained earnings and newissuance of ordinary shares.Question 42 At the beginning of the current year, CFAS Company declared a 10% share dividend. The market price of the entity's 300.000 outstanding shares of PS0 par value was P111 per share on that date. The share dividend was distributed on July 1 when the market price was P100 per share. What amount should be credited to share premium for the share dividend?
- PROBLEM 1 The following data were compiled prior to preparing statement of financial position of the Conviction Corporation:Authorized share capital, P100 par value P 4,000,000Unissued share capital 800,000Subscribed share capital 480,000Subscriptions receivable `120,000Premium on share capital 320,000Premium on bonds payable 240,000Gain on sale of treasury shares 80,000Donated capital 800,000Share warrants outstanding 200,000Reserve for bond sinking fund 400,000Reserve for depreciation 600,000Treasury shares, at cost 144,000Retained earnings, unappropriated 720,000Cash dividends payable 160,000Revaluation increment on property 800,000Net unrealized loss on financial assetsat fair value through OCI 96,000 1. What is the total legal capital? 2. What is the total shareholders’ equity?PROBLEM 1 The following data were compiled prior to preparing statement of financial position of the Conviction Corporation:Authorized share capital, P100 par value P 4,000,000Unissued share capital 800,000Subscribed share capital 480,000Subscriptions receivable `120,000Premium on share capital 320,000Premium on bonds payable 240,000Gain on sale of treasury shares 80,000Donated capital 800,000Share warrants outstanding 200,000Reserve for bond sinking fund 400,000Reserve for depreciation 600,000Treasury shares, at cost 144,000Retained earnings, unappropriated 720,000Cash dividends payable 160,000Revaluation increment on property 800,000Net unrealized loss on financial assetsat fair value through OCI 96,000 1. What is the total share premium? 2. What is the total contributed capital? 3. What is the total appropriated earnings?QUESTIONS 13.7 At 30 June 20X2 Walker Co's capital structure was as follows: Ordinary share capital 500,000 shares of 25c each Share premium account 125,000 100,000 In the year ended 30 June 20X3 the company made a rights issue of one share for every two held at $1 per share and this was taken up in full. Later in the year the company made a bonus issue of one share for every five held, using the share premium account for the purpose. What was Walker Co's capital structure at 30 June 20X3? Ordinary share capital Share premium account 2$ 450,000 225,000 225,000 ,0D 212,500 24 25,000 A ilaa 325,000 ws. 250,000 co08 to 262,500 %24
- #24At the beginning of current year, AILEEN company was authorized to issue share capital of120,000 shares with P50 par value. The entity had the following share capital transactionsduring the year:Jan 1 Sold 96,000 shares at P60 per shareMay 1 Reacquired 4,000 treasury shares at P65 per share.July 1 Approved a share split of 5 for 1.Oct. 31 Declared and issued a 10% share dividend when the market value of a share isP25.Dec. 31 Reissued all of the treasury shares at P30.Dec. 31 Net income for the year was P3,600,000.What total amount should be reported as share premium? 2,052,000 pls provide correct solution for the given answerProblem 5. Musuan Agro-Industrial Corporation has an authorized share capital of P2,000,000 with a par value of P100 per share. 8,000 shares were issued and outstanding. A 10% share dividend is declared. Required: Answer the following questions: 1. What is the journal entry to record both declaration and issuance of share dividends?12. Charice Company revealed the following shareholder's equity at year end: Preference share capital, P100 par 2,300,000 Share premium - PS 805,000 Ordinary share capital, P15 par 5,250,000 Share premium 2,750,000 Subscribed ordinary share capital 500,000 Retained earnings 1,900,000 Note payable 4,000,000 Subscription receivable - ordinary 400,000 How much is the legal capital? a. 8,050,000 b. 7,650,000 c. 9,950,000 d. 11,605,000
- quity Problem 4: Legal and Contributed Capital Aquinde Corporation has the following accounts in its shareholders equity on February 1, 20x1: Preference share, P100 par Ordinary share, P50 par Subscribed preference share Subscription receivable - preference Subscribed ordinary share Subscription receivable - ordinary Share premium - preference Share premium - ordinary Retained earnings Treasury share 5,000 ordinary share at cost 2,500,000 5,500,000 1,500,000 800,000 2,000,000 600,000 200,000 400,000 2,000,000 400,000 Required: Compute the following Contributed capital b. Legal capital Total shareholders' equity a. C.Problem 2: (Book Value per share with Two Classes of Preference Shares)TINT Corporation presents the following condensed statement of financial position as of the close of the year:Cash ₱ 520,000 Accounts Payable ₱ 550,000Other Assets 1,333,000 Ordinary Share Capital 550,0005% Preference Share Capital 330,0007% Preference Share Capital 220,000Accumulated Profits 203,000Total Assets ₱ 1,853,000 Total Equities ₱ 1,853,000The 5% preference share capital is cumulative, the 7% preference share capital is non-cumulative, but both are fully participating. The par value of all shares is ₱100. Requirements:C. Compute for the book value per share for: 5. Ordinary shares6.a. 5% Preference shares b. 7% Preference sharesQUESTION TWO B plc has the following capital structure: K’000Ordinary shares – K0.40 5,000 Retained earnings 500 10% Preference shares at K1 1,500 10% K100 redeemable debentures 3,000 Total funds employed 10,000 The market price of the preference shares is 80n ex-div, the ordinary shares are quoted at K1.62 cum-div per share. Debenture stock is quoted at K97.5 ex-interest per K100 nominal and will be redeemable at par in exactly 7 years’ time. B plc has just declared dividend of K1,500,000 in total for all issued ordinary shares. The dividend growth rate is 4% per year forever. Company tax is 30% per year. The market rate of return is 12% and the company has an equity beta value of 1.25 Required:a) Calculate WACC based on market values. b) Discuss the implications of using a wrong WACC value in project appraisal and comment on the current level of capital gearing.