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Homework answers / question archive / 1)information from Camille Corporation are displayed below: DESCRIPTION NO
1)information from Camille Corporation are displayed below: DESCRIPTION NO. OF SHARES Issued shares - Ordinary 23,250.00 Issued shares - Preference 4,500.00 Share dividends distributable - Ordinary 10,200.00 Subscribed shares - Ordinary 4,500.00 Subscribed shares - Preference 7,500.00 Additionally, treasury share balances are detailed as follows: ACCOUNT AMOUNT Treasury shares - Ordinary, P 8 per share P 12,000.00 24,000.00 Treasury shares - Preference, P12 per share
Required: Determine the number of shares entitled to receive dividends for: 1. Preference shares 2. Ordinary shares.
2)Assignment 1. Muscat Contribution Income Statement is presented below [ 7 marks]: Total Sales (600 units) $36,000 Variable expenses $12,000 Contribution Margin $24,000 Fixed expenses $6,000 Net Income $18,000 Required: a. Prepare Contribution Income Statement assuming that the business expects an increase in its total sales by $3,000 and decrease in variable cost per unit by 10%. (4 marks) b. Referring to the original contribution statement, calculate BEP in dollars. (1 mark) c. Referring to the original contribution statement, how many units would have to be sold by the business to earn a target profit of $26,000. Use the equation/ formula method and verify your answer by preparing Contribution Income Statement.
3)Herve Corporation has the following data related to share capital accounts: 10% Preference share capital, Php 20 par value, 11,500 shares issued and outstanding; Php 230,000.00 Ordinary share capital, Php 10.00 par value, 45,000 shares issued and outstanding; Php 450,000.00 Dividends are in arrears for two years. Herve declared Php 180,000 as cash dividends for the current year. Required: Determine the following: 1. Amount of regular preference dividends. = 2. Assume the preference shares are cumulative and participating, compute for: a. Dividend per preference share = b. Dividend per ordinary share
1)Shares dividend distributable are shares to be issued by the company but not yet issued. Hence, to be excluded for dividend. Subscribed shares are shares promised to be paid for by the investors however, have not been issued, hence to be excluded for dividend purposes. Further, treasury shares are shares bought back by the company from the open market, hence are to be excluded for the purpose of dividend.
1. Preference shares entitled to receive dividend = 4500 - (24000/12)
= 4500 - 2000
= 2500 shares
Preference shares entitled to receive dividend is 2500 shares
2. Ordinary shares entitled to receive dividend = 23250 - (12000/8)
= 23250 - 1500
= 21750 shares
Ordinary shares entitled to receive dividend is 21750 shares
2)
| Sales | $ 39,000 |
| Variable Costs | $ 11,700 |
| Contribution Margin | $ 27,300 |
| Fixed Costs | $ 6,000 |
| Net Operating Income | $ 21,300 |
Variable Cost per unit = $12000 / 600 = $20 per unit?
Revised Variable Cost per unit = $20 x 0.90 = $18 per unit
Revised Units sold = ($36000+3000) / 60 = 650 units
b.
Contribution Margin Ratio = $24000 /36000 = 66.67%
BEP = Fixed Costs / CM Ratio
= $6000 / 66.67% = $9000
c.
Unit Contribution Margin = $24000 / 600 = $40 per unit
Units required = (Fixed Costs + Target Profit) / Unit Contribution Margin
= ($6000+26000) / 40 = 800 units
| Sales | $ 48,000 |
| Variable Costs | $ 16,000 |
| Contribution Margin | $ 32,000 |
| Fixed Costs | $ 6,000 |
| Net Operating Income | $ 26,000 |
3)
1. Amount of regular preference dividends = 230000 x 10% = Php 23000.
2. If preference shares are cumulative then they will be entitled to dividends of last 2 years where dividends are not declared.
So as a whole preference shareholders get 3 years dividend.
a. Amount of preference dividend per share = (23000 x 3) / 11500 = Php 6.
b. Dividends to ordinary shares = 180000 - (23000 x 3) = Php 111000.
Dividend per ordinary share = 111000 / 45000 = Php 26.67
Conclusion:
1. Php 23000
2. a. Php 6
b. Php 26.67
