Raxx Ltd. began 2020 with the following balances in its shareholders' equity accounts: Common shares, unlimited shares authorized, 500,000 shares issued and outstanding..... $3,000,000 Retained earnings... 2,500,000 The following share-related transactions occurred during the year: Date Transaction Issued at $20 per share 100,000 $2.50 non-cumulative preferred shares with an unlimited number authorized. March 1 May Issued 50,000 common shares at $15 per share. Sept. 1 Repurchased and retired 150,000 common shares at $16 per share. Nov. 30 Declared and distributed a 3:1 share split on the common shares. Required a. Calculate the weighted-average number of shares outstanding using the information above b. Using the information provided, prepare an income statement for 2020 similar to Exhibit Cumulative effect of a change in depreciation method (net of $26,000 tax benefit). $ (136,500) Operating expenses (related to continuing operations). Gain on disposal of discontinued operations' assets (net of $8,600 tax expense). (2,072,500) Investment income on sale of investment in shares 37,500 400,000 Loss from operating discontinued operations (net of $40,000 tax benefit). Income taxes on profit from continuing operations. (182,500) Revenues ... (660,000) Loss from sale of plant assets". 5,375,000 (650,000) *The assets were items of equipment replaced with new technology.
Raxx Ltd. began 2020 with the following balances in its shareholders' equity accounts: Common shares, unlimited shares authorized, 500,000 shares issued and outstanding..... $3,000,000 Retained earnings... 2,500,000 The following share-related transactions occurred during the year: Date Transaction Issued at $20 per share 100,000 $2.50 non-cumulative preferred shares with an unlimited number authorized. March 1 May Issued 50,000 common shares at $15 per share. Sept. 1 Repurchased and retired 150,000 common shares at $16 per share. Nov. 30 Declared and distributed a 3:1 share split on the common shares. Required a. Calculate the weighted-average number of shares outstanding using the information above b. Using the information provided, prepare an income statement for 2020 similar to Exhibit Cumulative effect of a change in depreciation method (net of $26,000 tax benefit). $ (136,500) Operating expenses (related to continuing operations). Gain on disposal of discontinued operations' assets (net of $8,600 tax expense). (2,072,500) Investment income on sale of investment in shares 37,500 400,000 Loss from operating discontinued operations (net of $40,000 tax benefit). Income taxes on profit from continuing operations. (182,500) Revenues ... (660,000) Loss from sale of plant assets". 5,375,000 (650,000) *The assets were items of equipment replaced with new technology.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Raxx Ltd. began 2020 with the following balances in its shareholders' equity accounts:
Common shares, unlimited shares authorized,
500,000 shares issued and outstanding....
$3,000,000
Retained earnings...
2,500,000
The following share-related transactions occurred during the year:
Date
Transaction
Issued at $200 per share 100,000 $2.50 non-cumulative preferred shares with an
unlimited number authorized.
March 1
May
Issued 50,000 common shares at $15 per share.
Sept.
1
Repurchased and retired 150,000 common shares at $16 per share.
Nov.
30
Declared and distributed a 3:1 share split on the common shares.
Required
a. Calculate the weighted-average number of shares outstanding using the information above
b. Using the information provided, prepare an income statement for 2020 similar to Exhibit
Cumulative effect of a change in depreciation method
(net of $26,000 tax benefit).
$ (136,500)
Operating expenses (related to continuing operations).
Gain on disposal of discontinued operations' assets
(net of $8,600 tax expense).
(2,072,500)
Investment income on sale of investment in shares
37,500
400,000
Loss from operating discontinued operations
(net of $40,000 tax benefit).
Income taxes on profit from continuing operations.
(182,500)
Revenues
(660,000)
Loss from sale of plant assets".
5,375,000
(650,000)
*The assets were items of equipment replaced with new technology.
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