for share dividends. ctto

2. SHARE DIVIDENDS
•THESE ARE PAYABLE IN THE CORPORATION’S OWN SHARES
•REQUIRES APPROVAL OF SHAREHOLDERS
•REDUCES ACCUMULATED PROFITS(LOSSES)
•INCREASES SHARE CAPITAL

3. SHARE DIVIDENDS ENTRIES
•UPON DECLARATION
ACCUMULATED PROFITS (LOSSES) XXX
SHARE DIVIDENDS DISTRIBUTABLE XXX
•UPON DISTRIBUTION
SHARE DIVIDENDS DISTRIBUTABLE XXX
SHARE CAPITAL XXX

4. SHARE DIVIDENDS ARE DECLARED AS
• CERTAIN PERCENT OF TOTAL NUMBER OF SHARES ENTITLED TO RECEIVE DIVIDENDS
EXAMPLE:
KALAYAAN CORPORATION HAS P10,000 SHARES ISSUED AND OUTSTANDING WHEN IT DECLARES 25%
SHARE DIVIDENDS. THE NUMBER OF SHARES THAT WILL BE ISSUED TO THE SHAREHOLDERS AS SHARE
DIVIDENDS WILL BE 2,500 SHARES, COMPUTED AS FOLLOWS:
OUTSTANDING SHARES 10,000
X % OF DIVIDENDS DECLARED 25%
SHARE DIVIDENDS DECLARED 2,500

5. SHARE DIVIDENDS ARE DECLARED AS
• CERTAIN PERCENT OF TOTAL NUMBER OF SHARES ENTITLED TO RECEIVE DIVIDENDS
EXAMPLE:
EACH SHARE OUTSTANDING IS ENTITLED TO A 25% SHARE DIVIDEND . MR. X IS A HOLDER OF 500
SHARES, THE ADDITIONAL SHARES HE WILL RECEIVE IS 125 SHARES:
OUTSTANDING SHARES 600
X % OF DIVIDENDS DECLARED 25%
ADDITIONAL SHARE RECEIVE 125

6. SHARE DIVIDENDS ARE DECLARED AS
• A CERTAIN NUMBER OF SHARES PER SHARE HELD
• EXAMPLE:
BATO CORPORATION DECLARES A SHARE DIVIDEND OF “ONE-FOR-FIVE”. THERE ARE 20,000 SHARES
OUTSTANDING. IF MR. Y IS A HOLDER OF 1,OOO SHARES.
OUTSTANDING SHARES 20,000
DIVIDED BY 5
SHARE DIVIDENDS 4,000
FOR MR. Y
OUTSANDING SHARES 1,000
X 20%
INCREASE IN SHARES 200

7. SMALL SHARE DIVIDENDS
• UPON DECLARATION
ACCUMULATED PROFITS (LOSSES) (1,000X105) 105,000
SHARE PREMIUM FROM SHARE DIVIDEND (1,000X 5) 5,000
SHARE DIVIDENDS DISTRIBUTABLE (1,000X100) 100,000
• UPON DISTRIBUTION
SHARE DIVIDENDS DISTRIBUTABLE 100,000
SHARE CAPITAL 100,000
MARGARA CORPORATION, DECLARES A 10% SHARE DIVIDEND. IT HAS 10,000 SHARES ISSUED AND OUTSANDING PAR
VALUE OF P100. ON THE DATE OF DECLARATION THE MARKET VALUE PER SHARE IS P105.
LESS THAN 20%

8. LARGE SHARE DIVIDENDS
•UPON DECLARATION
ACCUMULATED PROFITS (LOSSES) (2,500X100) 250,000
SHARE DIVIDENDS DISTRIBUTABLE (2,500X100)
250,000
•UPON DISTRIBUTION
SHARE DIVIDENDS DISTRIBUTABLE 250,000
SHARE CAPITAL 250,000
MARGARA CORPORATION, DECLARES A 25% SHARE DIVIDEND. IT HAS 10,000 SHARES ISSUED AND OUTSANDING PAR
VALUE OF P100. ON THE DATE OF DECLARATION THE MARKET VALUE PER SHARE IS P105.
MORE THAN 20%

9. SHARE SPLIT
•REDUCES PAR PER AND INCREASES NUMBER OF
SHARES.
•NO EFFECT IN SHAREHOLDER’S EQUITY

10. SHARE SPLIT
MAHOGANY CORPORATION HAS 20,000 ORDINARY SHARES ISSUED AND OUTSTANDING AT PAR VALUE OF
P100 FOR P2,000.000. THE BOD DECIDED TO “SPLIT THE SHARE “FIVE FOR ONE”
20,000
X 5 (5 FOR 1)
100,000 SHARES X P20 (1/5 X P100) = P2,000,000

11. EXERCISES
•A CORPORATION HAS A 40,000 SHARES AND P25 PAR VALUE
STOCK OUTSTANDING, IF THE CORPORATION ISSUES 4-FOR-1
SPLIT STOCK SPLIT, THE NUMBER OF SHARES OUTSTANDING
AFTER THE SPLIT WILL BE?

12. EXERCISES
•A CORPORATION HAS 50,000 SHARES OF P28 PAR VALUE
STOCK OUTSTANDING THAT HAS A CURRENT MARKET VALUE
OH P160. IF THE CORPORATION ISSUES 4-FOR-1 STOCK SPLIT,
THE MARKET VALUE OF THE STOCK WILL FALL TO
APPROXIMATELY