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    Chapter 15 - Review

    Uploaded by

    Alisia Le

    Copyright:

    © All Rights Reserved
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    Chapter 15 - Review

    Uploaded by

    Alisia Le
    10 views6 pages

    Original Title

    CHAPTER 15 - REVIEW

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    © © All Rights Reserved

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    Copyright:

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    10 views6 pages

    Chapter 15 - Review

    Uploaded by

    Alisia Le

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 6

    CHAPTER 15: SHAREHOLDERS’ EQUITY

    COURSE GUIDE

    a) c)
    Dr. Cash 10,000 Dr. Common shares 2,000
    Cr. Common shares 10,000 Dr. Contributed surplus – cancellation 300
    (Record issue 1,000 common shares) Dr. Retained earnings 100
    Cr. Cash 2,400
    b) (Record the cancellation of 200 common shares)
    Dr. Common shares 1,000
    Cr. Contributed surplus – cancellation 300 d)
    Cr. Cash 700 Dr. Dividends 700
    (Record the cancellation of 100 common shares) Cr. Dividends declared 700
    (Record the dividends declared)
    e)
    Dr. Dividends declared 700
    Cr. Cash 700
    (Record dividend paid)

    Common shares Preferred shares


    Arrears of dividends 800
    Current year dividends 1,600 800
    Participating dividends 2,067 [(9,400-1,600-800-800)*2/3] 4,133 [(9,400-1,600-800-800)*1/3]
    3,667 5,733

    Common shares Preferred shares


    Number of shares 20,000 10,000
    Ratio of contribution 2/3 1/3
    a)
    Dr. Dividends 6,000 (10,000*6*10%)
    Cr. Stock dividends distributable 6,000

    Dr. Stock dividends distributable 6,000


    Cr. Common shares 6,000

    b)
    Number of shares Market price Total price Percentage
    Common shares 2 $2.5 $5 50%
    Preferred shares 1 5 $5 50%
    $10 100%

    Dr. Cash 8,000


    Cr. Common shares 4,000
    Cr. Preferred shares 4,000

    Number of shares Market price Total price Percentage


    Common shares 4 $3 $12 20%
    Preferred shares 1 $48 $48 80%
    $60 100%

    a)
    Dr. Cash 50,000
    Cr. Common shares 10,000
    Cr. Preferred shares 40,000
    A
    b)
    Arrears of dividends 8,000 (40,000*10%*2)
    Current year of dividends 4,000 (((40,000-8,000)*50%)*80%)
    Participating dividends 4,000
    16,000
    Dr. Common shares 20,000
    Cr. Contributed surplus – cancellations 5,000
    Cr. Cash 15,000

    Dr. Common shares 10,000


    Dr. Contributed surplus – cancellations 5,000
    Dr. Retained earnings 5,000
    Cr. Cash 20,000

    Common shares Preferred shares


    Arrears of dividends 8,000
    Year 2 dividends 16,000 8,000
    Participating dividends 6,000 [(41,000 -16,000-8,000-8,000)*2/3] 3,000 [(41,000-16,000-8,000-8,000)*1/3]
    22,000 19,000

    Common shares Preferred shares


    Number of shares 200,000 100,000
    Ratio of contribution 2/3 1/3

    d)
    a) Dr. Cash 70,000
    Dr. Subscriptions receivable 300,000 Cr. Subscription receivable 70,000
    Cr. Common shares subscribed 300,000
    e)
    b) Dr. Common shares subscribed 300,000
    Dr. Cash 100,000 Cr. Subscriptions receivable 50,000
    Cr. Subscriptions receivable 100,000 (300,000-100,000-80,000-70,000)
    Cr. Contributed surplus 40,000
    c) Cr. Common shares (70,000*3) 210,000
    Dr. Cash 80,000 Get the final payment because it is expired already
    Cr. Subscription receivable 80,000
    a)
    Number of shares Market price Total price Percentage
    Common shares 10 $6 $60 75%
    Preferred shares 5 $4 $20 25%
    $80 100%

    Dr. Cash 1,000,000


    Cr. Common shares 750,000
    Cr. Preferred shares 250,000

    b)
    Common shares Preferred shares
    2% dividends 15,000 5,000
    3% dividends 22,500 7,500
    Any excess to common 4,000 (54,000-15,000-22,500-5,000- 0
    7,500)
    41,500 12,500

    Dr. Common shares subscription 1,000,000


    Cr. Contributed surplus 25,000
    Cr. Common shares 900,000
    Cr. Subscription receivable 75,000
    QUIZ PRACTICE

    Dr. Common shares 122,400


    Dr. Retained earnings 21,600
    Cr. Cash 144,000

    Dr. Common shares 331,200


    Dr. Contributed surplus 5,670
    Dr. Retained earnings 8,730
    Cr. Cash 345,600

    Dr. Common shares 331,200


    Dr. Contributed surplus 14,600
    Cr. Retained earnings 200
    Cr. Cash 345,600

    Number of Market price Total price


    shares
    First time 108,000 $8 864,000
    Second time 162,000 $12 1,944,000
    Third time 54,000 $14 756,000
    324,000 $11.00 3,564,000
    (3,564,000/324,000)

    Arrears of dividends 37,800 (37,800*25*2%*2)


    Current year dividends 18,900 (37,800*25*2%)
    56,700

    Preferred Common Total


    shares shares
    937,500 3,750,000 4,687,500
    (37,500*25) (75,000*50)
    20% 80% 100%
    Current year dividends 37,500 150,000
    (937,500*(1/25) (3,750,000*4%)
    Participant dividends 23,700 94,800
    [(306,000- [(306,000-
    37,500- 37,500-
    150,000)*20%] 150,000)*80%]
    61,200 244,800
    Dr. Cash 22,000,000 (11,000*2,000)
    Cr. Common shares 8,800,000 (11,000*100*8)
    Cr. Preferred shares 13,200,000

    Number Market Total Percentage


    of price price
    shares
    Common shares 100 $8 $800 80%
    Preferred shares 10 $20 $200 20%
    $1,000 100%

    Dr. Cash 22,000,000


    Cr. Common shares 17,600,000
    Cr. Preferred shares 4,400,000

    Dr. Subscription receivable 1,190,000 (1,400*850)


    Cr. Common share subscribed 1,190,000

    Dr. Cash 595,000


    Cr. Subscription receivable 595,000

    Dr. Cash 505,750


    Cr. Subscripted receivable 505,750

    Cash received in total = ((700+(0.85*700))*850) = 1,100,750


    Dr. Common share subscribed 1,011,500 (1,100,750-89,250)
    Cr. Common shares 1,011,500

    Dr. Common share subscribed 178,500


    Cr. Subscription receivable 89,250
    Cr. Contributed surplus 89,250

    Dr. Dividends declared 19,200 (120,000*4*4%)


    Cr. Stock dividends distributable 19,200

    Dr. Stock dividends distributable 19,200


    Cr. Common shares 19,200

    Dr. Dividends 7,200 (120,000*0.06)


    Cr. Dividends declared 7,200

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