Exercise 6-3 (Small and Large Share Capital Dividends) The LMN Corporation has 500,000 shares of P10 par value ordinary share capital outstanding as of October 1, 2021. On this date, the Board of Directors declared a share capital dividend distributable on November 20, 2021 to shareholders of record of October 30. The market price of each ordinary share is P27 on October 1, P25 on October 30 and P35 on November 20. Instructions: Prepare the entries to record the declaration and distribution of stock dividends under each of the following independent assumptions: 1. A 18% share capital dividend was declared and issued. 2. A 50% share capital dividend was declared and issued.

Exercise 6-3 (Small and Large Share Capital Dividends) The LMN Corporation has 500,000 shares of P10 par value ordinary share capital outstanding as of October 1, 2021. On this date, the Board of Directors declared a share capital dividend distributable on November 20, 2021 to shareholders of record of October 30. The market price of each ordinary share is P27 on October 1, P25 on October 30 and P35 on November 20. Instructions: Prepare the entries to record the declaration and distribution of stock dividends under each of the following independent assumptions: 1. A 18% share capital dividend was declared and issued. 2. A 50% share capital dividend was declared and issued.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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2 ook int ences Common shares, unlimited shares authorized; 4,400,000 shares issued and outstanding Retained earnings $1,027,500 1,375,000 On April 1, 2020, 240,000 common shares were issued at $0.70 per share. On June 1, the board of directors declared a 5% share dividend to shareholders of record on June 15, the distribution date was July 1. The market prices of the shares on June 1, June 15, an July 1 were $2.78, $1.86, and $2.56, respectively. On December 11, the board of directors declared a 21 share split to shareholders of record on December 15, the distribution date was December 20. Profit earned during the year was $1,457,500 Required: Prepare the company's equity section on the December 31, 2020, balance sheet Total equity CARFIND INC Equity Section of Balance Sheet December 31, 2020 Contributed capital: Common shares, unlimited shares authorized. 9.744,000 shares issued and outstanding Retained earnings $ 0
Jager Metal Corp. Equity Section of the Balance Sheet November 30, 2023 Contributed capital: Preferred shares, $13.20 cumulative, 2,000 shares authorized and issued Common shares, unlimited shares authorized; 60,000 shares issued Total contributed capital Retained earnings Total equity Required Refer to the equity section above. Assume that the preferred shares are convertible into common at a rate of 6 common share for each share of preferred. If 1,000 shares of the preferred are converted into common shares on December 1, 2023, prepare the entry and describe how this affects the equity section of the balance sheet after the conversion. $ 480.000 1,440.000 $1,920,000 1,008,000 $2.928,000
Question 1 Part A Success Ltd. had the following equity balances as at July 1, 2020: Equity Share Capital (5,000,000 shares) Retained earnings General reserve $10,000,000 5,600,000 200,000 Total equity $15,800,000 Payment of interim dividend of two (2) cents per share to ordinary shareholders was made on February 28, 2021. A final dividend of three (3) cents per share for the 2020/2021 financial year had been declared on June 30, 2021, and will be paid on August 10, 2021. Profit after income tax for the year ended June 30, 2021 was $680,000. The directors approved a transfer of $20,000 from the retained earnings to the general reserve. Required: Prepare a statement of changes in equity for the year ended June 30, 2021. Show the movement for each of the equity items. (10 marks)
PROBLEM 5 - AUDITING PROBLEMSCompute fot the following:1. Number of ordinary shares issued and outstanding 2. Ordinary share capital
Problem 7-5 Carr Company reported the following shareholders' equity on January 1, 2019. Preference share capital Share premium – preference Ordinary share capital Share premium – ordinary Retained earnings Treasury shares – ordinary 1,800,000 90,000 5,150,000 3,500,000 4,000,000 270,000 On January 1, 2019, Carr had 100,000 authorized shares of P100 par, 10% cumulative preference share capital and 3,000,000 authorized shares of no par ordinary share capital with a stated value of P5 per share. On January 10, 2019, Carr formally retired all the 30,000 ordinary shares of treasury. The treasury shares had been acquired in the previous year and were originally issued at P10 per share. Carr owned 10,000 ordinary shares of Bush Company purchased several years ago for P600,000. On February 15, Carr declared and paid a dividend in kind of one share of bush for every hundred ordinary shares of Carr held by a shareholder of record on February 28, 2019. The market price of bush share was P75 on…
Question 40 On July 1, 2022, BFAR Corp. declared and issued 25% share dividend to its ordinary shareholders. Before the issuance of the said shares, the company had 28,000 shares of P13 par value ordinary shares that were both issued and outstanding. The fair market value of each share is P20. How much was credited to the Ordinary Share Capital upon issuance of the share dividend?
EXERCISE 3 The Blazing Red Corporation is authorized to issue 100,000 P 10 par value ordinary shares and 30,000 10% cumulative and non-participating PI00 par preference shares. The corporation engaged in the following share capital transactions through December 31,2020: 30,000 ordinary shares were issued for P 380,000 and 12,000 preference shares for an equipment valued at P 1,500,000. Subscriptions for 10,000 ordinary shares have been taken and 40% of the subscription price of P 16 per share has been collected. The shares will be issued upon collection of the subscription price in full. • 1,000 ordinary treasury shares were purchased for P 18. Collected the balance on the subscription of 8,000 shares above and share certificates were accordingly issued. Subscribers on 2,000 shares defaulted and the shares were declared delinquent. Blazing Red paid P 2,000 cost for advertising the delinquent shares. Received bids on the delinquent shares. The amount due from the highest bidder was…
Financial Accounting & Reporting: Dividend Distribution
Answer 6 and 7 only
Question 2The equity accounts of Marvell Ltd. on January 1, 2020, were as follows.Share Capital—Preference (9%, $50 par, cumulative,10,000 sharesauthorized, 8,000 shares issued)?Share Capital—Ordinary ($1 stated value, 2,000,000 shares authorized,1,000,000 shares issued)?Share Premium—Preference 100,000Share Premium—Ordinary 1,450,000Retained Earnings 1,816,000During 2020, the corporation had the following transactions and events pertaining to its equity.Jan 25 Purchased 20,000 ordinary shares for the treasury at a cost of $2.5 per share.Feb. 1 Issued 50,000 ordinary shares for $152,000.Apr. 14 Reissued 10,000 treasury shares—ordinary for $42,000.Nov. 10 Purchased 1,000 ordinary shares for the treasury at a cost of $6 per share.Dec. 31 Determined that net income for the year was $452,000. Close the income summaryaccount.Dec. 31 Declared a dividend of $0.5 per ordinary share, to be payable in April 2021. Dividendfor the preference shares was not paid in 2019.Instructions(a.) Journalize…
Exercise 8-5 (Issuance of Share Capital on a Subscription Basis) On June 1, 2014, Simplicity, Inc. sold 35,000 shares of its P20 par value ordinary share capital on a subscription basis at P50 per share. Símplicity received a 60% down payment on the date of subscription. On September 8, 2014, Simplicity received the balance on the subscription and the stock certificates were issued. Instructions: Prepare journal entries to record the preceding transactions.
29 An entity provided the following data for the current year: Net Income – P 4,000,000 Ordinary shares – 250,000 Share Option (exercise price of P 60), issued on February 1 (Average Market Price, P 75)– 48,000 5% Preference share capital, P100 par, convertible and cumulative, issued on March 1, can be converted into 18,000 ordinary shares (dividends paid on June) – P 3,600,000 12% Bonds Payable, issued on May 1, can be converted into 30,000 ordinary shares– P 3,000,000 Income Tax Rate – 30% How much is the incremental EPS of convertible preference share? (round-off to nearest centavo)

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