FAR DIVIDENDS

Question 1

Problem 1 (determination of number of outstanding shares; maximum dividends)
The shareholders’ equity of Anders Co. at the beginning of 2020 shows the following accounts and balances:
8% Preference share capital, P20 par Ordinary share capital, P10 par Share premium
Retained earnings
Treasury shares (100,000 ordinary shares)
P
2,000,000
8,000,000 15,000,000 13,000,000
(5,000,000)
Anders declared the maximum amount of dividends that it can declare on August 1. The dividends were distributed on October 1 to shareholders of record on September 1.

1. Determine the number of preference shares issued.