Question 12 of 30When preference share is sold on a subscription basis involving a 25% down payment and the balance in two equal installments. The collection of the first installment is recorded bySelect the correct response:a debit to Cash and a credit to Share Capital-Preferencea debit to Subscription Receivable-Preference and a credit to Subscribed Share Capital-Preferencea debit to Cash and a credit to Subscription Receivable-Preferencea debit to Subscribed Share Capital-Preference and a credit to Share Capital-Preference

>Shares are usually issued to the subscriber in way that not all of the amount is collected…

Answered: Question 12 of 30 When preference share…

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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Question 3The following Trial Balance was extracted from the books of A.B.L Sdn Bhd asat 31 December 20X1:Trial Balance as at 31 December 20X1 Dr CrRM RM Capital – issued & fully paid:60,000 Ordinary shares 60,00020,000 non- redeemable Preference shares 20,000General reserves 14,000Balance of retained earnings 7,0005% Debentures 50,000Trade receivables and Trade payables 42,240 44,000Cash at bank 35,000Land and building at cost 100,000Plant and machinery at cost 50,000Inventories 31,000Cash in hand 1,000Accumulated depreciation, 1 January 20X1Land and building 20,000Plant and machinery 7,500Gross profit 145,000Administrative expenses 44,000Selling and distribution expenses 56,000Discounts 500 1,540Debenture interest 2,500Legal fees 1,200Directors’ fees 5,600369,040 369,040 Required:Prepare the Statement of Profit or Loss and an extract of the Statement ofChanges in Equity (showing the movements in retained earnings) for the yearended 31 December 20X1 and the Statement of Financial…
Question Two The Whispering Cove plc has provided the following as at December 31, 2017 Cost of Sales Closing Stock 10% Debenture Debenture Interest General Reserves Retained Earnings Goodwill Ordinary Share Capital @ $2 10% Preference Share Capital @ $1 Sales Turnover Debtors Bank Administrative Costs Selling and Distribution Costs Property Plant & Equipment Motor Vehicle Provision for Depreciation on Motor Vehicle Creditors Interim Ordinary Shares Dividend Additional Details Provided DR 700.000 210,000 20,000 20,000 200,000 60,000 122,000 139,000 600,000 500,000 CR 350,000 1. Prepa the lowing for year ending December 31, 2017 : a) The Statement of Profit and Loss 40,000 b) The Statement of Change in Equity NOTE: The Statement of Financial Position is NOT required 2. State three factors that may influence a company's decision to pay dividends 400,000 400,000 1,300,000 8,000 5,000 2,576,000 2,576,000 40,000 38,000 1. The motor vehicle is to be depreciated at 10% p.a. on the reducing…
Question 5 Grocer Grocey Bhd has in issue 1,000,000 ordinary shares issued at RM3.50 per share and 500,000 redeemable preference shares issued at RM1.50 per share. The preference shares are redeemed at RM1.50 out of the capital. For the purpose of the redemption, Grocer Grocey Bhd also has sufficient retained profits but not revaluation reserves. Required: a) Calculate the total contributed capital immediately after the issuance of shares. b) Prepare the journal entry to record i) the issuance of shares. (Assume Grocer Grocey received cash). ii) the redemption of the preference shares
Exercise 3 – 7 (Issuance of Share Capital on a Subscription Basis) The Sales Co. was organized on June 1, 2019, with an authorized capital of 400,000 ordinary shares with a par value of P20. The following are selected transactions of the corporation during September: Sept. 1 Received subscription for 120,000 shares at P25 per share. A down payment of 40% was received from the subscribers. The balance is due in three equal installments. 8 Issued 23,000 shares in exchange for land valued at P750,000. 10 Received the first installment from the subscribers. 20 Received the second installment due from the subscribers. 30 Received the final installment from all subscribers and a share of stock was issued. Instructions: Prepare journal entries to record the preceding transactions.
Problem 11. Prosperous Ltd. issued 25,000 7 per cent Debentures of $ 100 each at a discount 2% 25 per cent on 1st January 2013. As per the terms of the issue, the company is required to maintain a non-cumulative Sinking Fund (i.e., exclusive of interest on Sinking Fund investments) but with a provision that the company shall have the power to apply the Sinking Fund Investments in the purchase of Debentures in the open market, if below par, at any time. The annual Sinking Fund contribution is $60,000. Following are the relevant facts for the years 2014 and 2015 : (A) Interest received by the company on Investments: (1) 2014 $ 1,970 (2) 2015 $ 3,040 (B) Realisation of Sinking Fund Investments : (1) 31 December 2014 $ 27,930 (original cost $ 28,010) (2) 31 December 2015 $ 39,000 (original cost $ 38,700) (C) Debentures purchased in the open market : (1) 31 December 2014 at cost of $ 27,915 (paid up value $ 29,315) (2) 31 December 2015 at cost of $ 39,000 (paid up value $ 39,150) You are…
60 Analyze the following: I – Cumulative preference dividends in arrears should be reported as a note disclosure. II – Depreciable assets which are part of the component held for sale shall be depreciated. III – According to PAS 10, date of authorization for FS issuance is when the board of directors approves the release of financial statements regardless of the approval of the stockholders. Given these, we can conclude that: Group of answer choices Only statement I is true. Only statement II is false. Only statements II and III are false. Only statement III is false.
Question 23 Not yet answered Points out of 3.00 Flag question The Shippecasse Company had a Current Ratio of 12. The Company declared a $10,000 cash dividend to preferred shareholders and immediately paid 70% of it. What is the combined effect of these two transactions on the current ratio and total stockholders' equity, respectively? Select one: O a. Increase, Increase Ob. Decrease, Decrease Oc Increase, Decrease Od. No Effect, increase Oe Decrease, No Effect
Question Content Area Sorenson Co. is considering the following alternative plans for financing the company: Plan 1 Plan 2 Issue 10% bonds (at face) - $400,000 Issue $10 par common stock $600,000 $200,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $150,000. Round your answers to two decimal places. Earnings Per Common Share Plan 1 $fill in the blank 1 Plan 2 $fill in the blank 2
15-4 Share repurchases Select one: a. reduce earnings. b. reduce EPS. c. reduce the number of outstanding shares. d. increase earnings. e. have no effect on the firm.
H 12
Year 2 Year 1 Preference share, par value P50, 10%. Ordinary share, par value P20. Share premium - ordinary share.. Retained earnings... P100,000 400,000 P100,000 400,000 100,000 100,000 140,000 120,000 Net income 60,000 10,000 80,000 Dividends on preference share Dividends on ordinary share Market price per share, Dec 31. 10,000 50,000 40,000 28.00 21.00 Instruction: Determine the following A. Price-earnings ratio B. Dividend yield ratio C. Payout ratio D. Return of Equity E. Book value per share
Problem 11-15 Schuss Inc. can sell preferred shares for $74 with an estimated flotation cost of $4.00. The preferred stock is anticipated to pay $10 per share in dividends. a. Compute the cost of preferred stock for Schuss Inc. (Round the final answer to 2 decimal places.) Cost of preferred stock% b. Do we need to make a tax adjustment for the issuing firm? O Yes O No

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