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P14-9B Sarnia Hardware Ltd. reported the following shareholders' equity on December 31, 2019: Contributed capital Preferred shares, $0.50 cumulative, convertible to common on a 2-for-1 basis, 50,000 shares authorized, 20,000 shares issued and outstanding $ 55,000 Common shares, unlimited number of shares authorized, 50,000 shares issued and outstanding Total contributed capital Retained earnings Total shareholders' equity 62,500 117,500 110,000 $227,500

P14-9B Sarnia Hardware Ltd. reported the following shareholders' equity on December 31, 2019: Contributed capital Preferred shares, $0.50 cumulative, convertible to common on a 2-for-1 basis, 50,000 shares authorized, 20,000 shares issued and outstanding $ 55,000 Common shares, unlimited number of shares authorized, 50,000 shares issued and outstanding Total contributed capital Retained earnings Total shareholders' equity 62,500 117,500 110,000 $227,500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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B P14-9B Sarnia Hardware Ltd. reported the following shareholders' equity on December 31, 2019: Contributed capital Preferred shares, $0.50 cumulative, convertible to common on a 2-for-1 basis, 50,000 shares authorized, 20,000 shares issued and outstanding $ 55,000 Common shares, unlimited number of shares authorized, 50,000 shares issued and outstanding Total contributed capital Retained earnings Total shareholders' equity 62,500 117,500 110,000 $227,500
Transcribed Image Text:B P14-9B Sarnia Hardware Ltd. reported the following shareholders' equity on December 31, 2019: Contributed capital Preferred shares, $0.50 cumulative, convertible to common on a 2-for-1 basis, 50,000 shares authorized, 20,000 shares issued and outstanding $ 55,000 Common shares, unlimited number of shares authorized, 50,000 shares issued and outstanding Total contributed capital Retained earnings Total shareholders' equity 62,500 117,500 110,000 $227,500
The following information is available for the year ended December 31, 2020: ..................... $212,500 95,000 65,000 4,000 2,500 Sales for the year. Cost of goods sold. Operating expenses.... Income from discontinued operations.. Loss on sale of discontinued operations... Required 1. Record the following transactions in the general journal. Explanations are not required. Mar. 7 Apr. 1 Jun. 6 Aug. 5 Sep. 15 Dec. 31 Declared a cash dividend of $12,500, payable on April 1 to the shareholders of record on March 15. Indicate the amount payable to each class of shareholder. Paid the cash dividend declared on March 7. Declared a 5 percent stock dividend on the common shares, distributable on August 5 to the shareholders of record on July 4. The market value of the shares was $1.50 per share. Distributed the common shares dividend declared on June 6. Received notification from the Canada Revenue Agency that Sarnia Hardware Ltd. had made an error in filing its 2019 taxes. The reassessment showed that the company had reported and overpaid $4,000 in taxes. Close the Income Summary account, assuming the income tax on all types of income is 40 percent. 2. Prepare a combined multi-step statement of income and retained earnings for the year ended December 31, 2020. Use a three-column format to break out the information for discontinued operations. Include earnings per share information.
Transcribed Image Text:The following information is available for the year ended December 31, 2020: ..................... $212,500 95,000 65,000 4,000 2,500 Sales for the year. Cost of goods sold. Operating expenses.... Income from discontinued operations.. Loss on sale of discontinued operations... Required 1. Record the following transactions in the general journal. Explanations are not required. Mar. 7 Apr. 1 Jun. 6 Aug. 5 Sep. 15 Dec. 31 Declared a cash dividend of $12,500, payable on April 1 to the shareholders of record on March 15. Indicate the amount payable to each class of shareholder. Paid the cash dividend declared on March 7. Declared a 5 percent stock dividend on the common shares, distributable on August 5 to the shareholders of record on July 4. The market value of the shares was $1.50 per share. Distributed the common shares dividend declared on June 6. Received notification from the Canada Revenue Agency that Sarnia Hardware Ltd. had made an error in filing its 2019 taxes. The reassessment showed that the company had reported and overpaid $4,000 in taxes. Close the Income Summary account, assuming the income tax on all types of income is 40 percent. 2. Prepare a combined multi-step statement of income and retained earnings for the year ended December 31, 2020. Use a three-column format to break out the information for discontinued operations. Include earnings per share information.
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