oped Cookware Inc. (CCI) designs, manufactures and sells high-end cookware to the culinary industry and home chefs. O, with an unlimited number of common shares, and 50,000 preferred shares with a $3 dividend rate authorized. CCI F sactions took place during their first year of operations with respect to share capital: January 1st January 15th February 20th March 3rd May 10th The articles of incorporation were filed and state that an unlimited number of common shares and authorized. 30,000 common shares were sold by subscription to three individuals, who each purchased 10,00 terms require 10% of the balance to be paid in cash immediately; The balance was to be paid by Dec the shares will be issued. 70,000 common shares were sold by subscription to seven individuals, who each purchased 10,000 terms require that 10% of the balance be paid in cash immediately, with the balance to be paid by C to be issued once the full payment is received. 50,000 common shares were sold by an underwriter for $52 per share. The underwriter charged CCI CCI paid $2,000 to a printing company for costs involved in printing common share certificates. As w
oped Cookware Inc. (CCI) designs, manufactures and sells high-end cookware to the culinary industry and home chefs. O, with an unlimited number of common shares, and 50,000 preferred shares with a $3 dividend rate authorized. CCI F sactions took place during their first year of operations with respect to share capital: January 1st January 15th February 20th March 3rd May 10th The articles of incorporation were filed and state that an unlimited number of common shares and authorized. 30,000 common shares were sold by subscription to three individuals, who each purchased 10,00 terms require 10% of the balance to be paid in cash immediately; The balance was to be paid by Dec the shares will be issued. 70,000 common shares were sold by subscription to seven individuals, who each purchased 10,000 terms require that 10% of the balance be paid in cash immediately, with the balance to be paid by C to be issued once the full payment is received. 50,000 common shares were sold by an underwriter for $52 per share. The underwriter charged CCI CCI paid $2,000 to a printing company for costs involved in printing common share certificates. As w
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:0
2
4
16
18
20
22
Chopped Cookware Inc. (CCI) designs, manufactures and sells high-end cookware to the culinary industry and home chefs. CCI was incorporated during
2020, with an unlimited number of common shares, and 50,000 preferred shares with a $3 dividend rate authorized. CCI follows ASPE. The following
transactions took place during their first year of operations with respect to share capital:
January 1st
January 15th
February 20th
March 3rd
May 10th
September 23rd
November 28th
December 31st
The articles of incorporation were filed and state that an unlimited number of common shares and 50,000 preferred shares are
authorized.
December 31st
30,000 common shares were sold by subscription to three individuals, who each purchased 10,000 shares for $50 per share. The
terms require 10% of the balance to be paid in cash immediately. The balance was to be paid by December 31, 2021, at which time
the shares will be issued.
70,000 common shares were sold by subscription to seven individuals, who each purchased 10,000 shares for $50 per share. The
terms require that 10% of the balance be paid in cash immediately, with the balance to be paid by December 31, 2020. Shares are
to be issued once the full payment is received.
50,000 common shares were sold by an underwriter for $52 per share. The underwriter charged CCI a 5% commission on the sale.
CCI paid $2,000 to a printing company for costs involved in printing common share certificates. As well, an invoice for legal fees
related to the issue of common shares was received for $15,000.;
CCI issued a combination of 2,000 common and 1,000 preferred shares to a new shareholder for a total price of $200,000. CCI was
unable to estimate a fair value of the preferred shares, and the most recent sale of common shares was used to estimate the value of
the common share portion of the transaction.
CCI wanted to recognize the efforts of a key employee and offered him the opportunity to purchase 500 common shares for $52, to
be paid by December 31, 2021. The employee accepted the offer and signed a note payable to CCI in the exchange. No interest was
to be charged on the outstanding balance; however, the shares were issued immediately.
Of the seven subscriptions issued on February 20, five subscriptions were paid in full and two subscribers defaulted. According to
the subscription contract, the defaulting subscribers would not be issued shares for any amount that had been paid and no cash
would be refunded.
CCI declared a dividend of $200,000 for 2020. Net income for the year was $800,000.
24
26
28 REQUIRED:
30 1. Prepare the journal entries to record the transactions for the year.
31 2. What was amount of the Dividend Per Common Share declared on December 31st? Round to two decimal places.
32 3. Prepare the Shareholders' Equity section of the Statement of Financial Position as at December 31, 2020.
33
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education