The following information are gathered from Relaxz Corporation: Relaxz Corporation’s charter became effective on January 2, 2015, when 80,000, P10 par value, ordinary shares and 40,000, 5% cumulative, nonparticipating, preference shares were issued. The ordinary shares were sold at P12 per share and the preference shares, at its par value of P100 per share. Relaxz was unable to pay preference dividends at the end of its first year. The owners of the preference shares agreed to accept 2 ordinary shares for every 50 shares of preference shares owned in lieu of the preference share dividends due on December 31, 2015. The shares were issued on January 2, 2018. The fair market value was P30 per share for ordinary share on the date of issue. On May 1, 2017, Relaxz sold 40,000 ordinary shares at par. Relaxz split its ordinary shares 3 for 2 on January 1, 2018, and 2 for 1 on January 1, 2019. The corporation offered to convert 20% of the preference shares to ordinary on the basis of 2 ordinary shares for 1 preference share. The offer was accepted, and the conversion was made on July 1, 2019. No cash dividends were declared on ordinary shares until December 31, 2017. Cash dividends per ordinary share were declared and paid as follows: December 31 June 30 2017 P4.00 0 2018 P5.00 P3.00 2019 P2.00 P2.50 1. Compute for the number of ordinary shares outstanding as of December 31, 2019. 2. Compute for the number of preference shares outstanding as of December 31, 2019.

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter13: Earnings Per Share (eps)

Section: Chapter Questions

Problem 1R: Ponce Towers, Inc., had 50,000 shares of common stock and 10,000 shares of 100 par value, 8%...

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The following information are gathered from Relaxz Corporation:

Relaxz Corporation’s charter became effective on January 2, 2015, when 80,000, P10 par value, ordinary shares and 40,000, 5% cumulative, nonparticipating, preference shares were issued. The ordinary shares were sold at P12 per share and the preference shares, at its par value of P100 per share.
Relaxz was unable to pay preference dividends at the end of its first year. The owners of the preference shares agreed to accept 2 ordinary shares for every 50 shares of preference shares owned in lieu of the preference share dividends due on December 31, 2015. The shares were issued on January 2, 2018. The fair
market value was P30 per share for ordinary share on the date of issue.
On May 1, 2017, Relaxz sold 40,000 ordinary shares at par.
Relaxz split its ordinary shares 3 for 2 on January 1, 2018, and 2 for 1 on January 1, 2019.
The corporation offered to convert 20% of the preference shares to ordinary on the basis of 2 ordinary shares for 1 preference share. The offer was accepted, and the conversion was made on July 1, 2019.
No cash dividends were declared on ordinary shares until December 31, 2017. Cash dividends per ordinary share were declared and paid as follows:

1. Compute for the number of ordinary shares outstanding as of December 31, 2019.

2. Compute for the number of preference shares outstanding as of December 31, 2019.

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