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). i) the redemption of the preference shares

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
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
Transcribed Image Text: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
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Investments and Financial instruments
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education