Question

In: Accounting

On 1 January 2016, Jake Ltd had these equity accounts: Share Capital (50 000 shares issued...

On 1 January 2016, Jake Ltd had these equity accounts:

Share Capital (50 000 shares issued for $20 each) $1 000 000

General Reserve 200 000

Retained Earnings 600 000

During the year, the following transactions occurred:

Feb. 1 Declared an $0.80 cash dividend per share to shareholders, payable on 1 March.

Mar. 1 Paid the dividend declared in February.

July 1 Declared a 5% share dividend to shareholders, distributable on 31 July. On 1 July, the market price of the shares was $30 per share and this was determined to be the amount at which the dividend shares would be issued.

July 31 Issued the shares for the share dividend.

Dec. 1 Declared a cash dividend of $0.40 per share, payable on 5 January 2017.

Enter the beginning balances and post the entries to the equity and liability T accounts.

Solutions

Expert Solution

Share capital Additional share capital
Date Debit Date Credit Date Debit Date Credit
Jan 1. 1000000 July 1.
July 31. 50000 (50000*5%*10) 25000
0 1050000 0 25000
Bal. 1050000 Bal. 25000
General reserve Retained earnings
Date Debit Date Credit Date Debit Date Credit
Jan 1. 200000 Feb 1. Jan 1. 600000
(50000*0.80) 40000
July 1.
(50000*5%*30) 75000
Dec 1. 21000
136000 600000
Bal. 464000
Dividend payable Share dividend payable
Date Debit Date Credit Date Debit Date Credit
Mar 1. 40000 Feb 1. July 31. 50000 July 1.
(50000*0.80) 40000 (50000*5%*20) 50000
Dec 1. 21000 50000 50000
40000 61000
Bal. 21000
Note:1
Dividend payable on Dec 1:
Share capital outstanding as on Dec 1.
Nos.
Beginning balance 50000
Add: Share dividend (50000*5%) 2500
Share capital outstanding as on Dec 1. 52500
Dividend payable=52500*0.40=$ 21000

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

On January 1, 2017, Conway Ltd. had the following shareholders' equity accounts: Common shares, unlimited number...
On January 1, 2017, Conway Ltd. had the following shareholders' equity accounts: Common shares, unlimited number of shares authorized, 1.5 million issued - $1,650,000 Retained earnings- 550,000 It was also authorized to issue an unlimited number of $6 noncumulative preferred shares. During 2017, the corporation had the following transactions and events related to its shareholders' equity: Jan 2 Issued 100,000 preferred shares at $66 per share March 31 Paid quarterly dividend to preferred shareholders April 18 Issued 250,000 common shares...
The equity accounts of Donald Corporation on January 1, 2020, were as follows. Share Capital –...
The equity accounts of Donald Corporation on January 1, 2020, were as follows. Share Capital – Preference 8%, cumulative, $50 par,   12,000 share authorized and issued           $600,000 Share Capital – Ordinary $1 stated value, 2,200,000 shares authorized,   1,200,000 shares issued and 1,170,000 shares outstanding      1,200,000   Share Premium – Preference       120,000 Share Premium – Ordinary​         1,300,000 Retained Earnings​           2,000,000 Treasury Shares – Ordinary (30,000 shares)​      120,000 During 2020, the company had...
On 1 January 2019, Melor acquired 90% of the equity share capital of Chempaka in a share exchange in which Melor issued two new shares for every three shares it acquired in Chempaka.
On 1 January 2019, Melor acquired 90% of the equity share capital of Chempaka in a shareexchange in which Melor issued two new shares for every three shares it acquiredin Chempaka. Additionally, on 31 December 2019, Melor will pay the shareholders ofChempaka RM1.76 per share acquired. Melor’s cost of capital is 10% per annum. At the dateof acquisition, shares in Melor and Chempaka had a share market value of RM6.50 andRM2.50 each respectively.Statement of Profit of Loss for the year...
Classic Automobiles of Huntsville Ltd. was formed on January 1, 2016 when Classic issued common shares...
Classic Automobiles of Huntsville Ltd. was formed on January 1, 2016 when Classic issued common shares for $300,000. Early in January 2016, Classic made the following cash payments: · $150,000 for equipment · $120,000 for inventory (four cars at $30,000 each) · $20,000 for 2016 rent on a store building In February 2016, Classic purchased six cars for inventory on account. Cost of this inventory was $240,000 ($40,000.00 each). Before year-end, Classic paid $200,000 of this debt. Classic uses the...
Classic Automobiles of Huntsville Ltd. was formed on January 1, 2016 when Classic issued common shares...
Classic Automobiles of Huntsville Ltd. was formed on January 1, 2016 when Classic issued common shares for $300,000. Early in January 2016, Classic made the following cash payments: · $150,000 for equipment · $120,000 for inventory (four cars at $30,000 each) · $20,000 for 2016 rent on a store building In February 2016, Classic purchased six cars for inventory on account. Cost of this inventory was $240,000 ($40,000.00 each). Before year-end, Classic paid $200,000 of this debt. Classic uses the...
Classic Automobiles of Huntsville Ltd. was formed on January 1, 2016 when Classic issued common shares...
Classic Automobiles of Huntsville Ltd. was formed on January 1, 2016 when Classic issued common shares for $300,000. Early in January 2016, Classic made the following cash payments: $150,000 for equipment $120,000 for inventory (four cars at $30,000 each) $20,000 for 2016 rent on a store building In February 2016, Classic purchased six cars for inventory on account. Cost of this inventory was $260,000 ($43,333.33 each). Before year-end, Classic paid $208,000 of this debt. Classic uses the FIFO method to...
On January 1, 2016, Fascom had the following account balances in its shareholders' equity accounts.   Common...
On January 1, 2016, Fascom had the following account balances in its shareholders' equity accounts.   Common stock, $1 par, 247,000 shares issued 247,000   Paid-in capital - excess of par, common 494,000   Paid-in capital - excess of par, preferred 165,000   Preferred stock, $100 par, 16,500 shares outstanding 1,650,000   Retained earnings 3,300,000   Treasury stock, at cost, 4,700 shares 23,500 During 2016, Fascom Inc. had several transactions relating to common stock. January 15: Declared a property dividend of 100,000 shares of Slowdown Company...
On January 1, 2016, Gerlach Inc. had the following account balances in its shareholders' equity accounts....
On January 1, 2016, Gerlach Inc. had the following account balances in its shareholders' equity accounts. Common stock, $1 par, 250,000 shares issued 250,000 Paid-in capital—excess of par, common 500,000 Paid-in capital—excess of par, preferred 100,000 Preferred stock, $100 par, 10,000 shares outstanding 1,000,000 Retained earnings 2,000,000 Treasury stock, at cost, 5,000 shares 25,000 During 2016, Gerlach Inc. had several transactions relating to common stock. January 15: Declared a property dividend of 100,000 shares of Slowdown Company (book value $10...
Company Alpha Trading Ltd. has a share capital of 2,000 shares, issued at the par value...
Company Alpha Trading Ltd. has a share capital of 2,000 shares, issued at the par value of 100 RON/share. In September N the company issues another 1,000 shares at 150 RON/share. On 30th September N all the shares were subscribed but contribution has not yet been paid. On 31st of October N, the shareholder paid the contribution. Which of the following is correct? Choose one On 31.10.N cash decreases with 100,000 RON On 31.10.N the shareholders’ receivable increases with 150,000...
AX Development Ltd purchased machinery on 1 April 2016 for $1 200 000; it had an...
AX Development Ltd purchased machinery on 1 April 2016 for $1 200 000; it had an estimated useful life of 12 years. AX Development uses the cost model and the straight-line method for depreciation. On 31 March 2018, the fair value less costs to sell for the machinery is $890 000, and the value-in-use is estimated to be $900 000. On 31 March 2019, the fair value less costs to sell for the machinery is $820 000, and the value-in-use...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT