Question

In: Accounting

Problem 3: Suppose On 1 Jan. 2019 XYZ Corporation issued 1 million ordinary shares having face...

Problem 3:

Suppose On 1 Jan. 2019 XYZ Corporation issued 1 million ordinary shares having face value of $1 each at an issue price of $2.5 per share. As per the terms of the issue, the full amount due had been received by the corporationby 10 Jan. 2019. The Corporationreceived 200% subscription on its share issue. By 31 Jan, the Corporation completed allotment of 1 million shares and returned the excess money to its investors.

As on 31 Jan 2019

  1. What is the issued capital of the corporation?
  2. What is the subscribed capital of the corporation?
  3. Has the issue been oversubscribed or undersubscribed?
  4. How much cash did the corporation receive on application?
  5. What is the paid-up share capital of the corporation?
  6. What is the amount in its share premium account?
  7. How much cash does the corporation hold after allotment on 31 Jan 2019?
  8. What are the components of balance sheet as on31 Jan 2019?

BALANCE SHEET Extract

31 Jan 2019

Assets:

Cash

Other assets

0

Total Assets

Liabilities:

Total liabilities

0

Shareholders’ Equity:

Share capital

Additional paid in capital

Total Shareholders’ equity

Balance sheet total

Solutions

Expert Solution


Related Solutions

Maxi Berhad offered 1 million ordinary shares for issue to public on 1 January 2018 having...
Maxi Berhad offered 1 million ordinary shares for issue to public on 1 January 2018 having face value of RM1 each at an issue price of RM1.50 per share. Maxi Berhad requires the equity injection to finance a new project. The minimum amount of subscription necessary for the project is RM1,250,000. As per the terms of the issue of shares, RM1.50 per share was to be received in full from the applicantson 30November 2018. A total amount of RM3,000,000 was...
On Jan. 1, 2018, B&Z Inc. issued 12% bonds with a face value of $10 million...
On Jan. 1, 2018, B&Z Inc. issued 12% bonds with a face value of $10 million dated Jan. 1. The bonds mature in 5 years. Currently, the market rate for similar bonds is 10%. Interest is paid quarterly. Calculate the price of the bonds. Provide the journal entry for the seller of the bonds assuming the sale takes place on Jan. 1. Assume the market rate at the time of issuance was 12%. Recalculate the price of the bonds based...
WACC Information extracted from XYZ firm are as follow: Common Shares issued: 1 million shares Share...
WACC Information extracted from XYZ firm are as follow: Common Shares issued: 1 million shares Share Price: $5 per share Bonds issued: 10,000 bonds Face Value of Bond: $1,000 Price of Bond: $1,044.52 Coupon rate of bond: 5% Maturity of Bond: 5 years Information extracted from Factset are as follow: XYZ’s beta: 1.2 times of market beta 10-year Treasury Bond yield: 3% 5-year AA bond yield: 3.5% 5-year A bonds have a spread of 0.5% above AA bond yields Expected...
On 1 November 2019, Pink Ltd issued a prospectus inviting applications for 200 000 ordinary shares...
On 1 November 2019, Pink Ltd issued a prospectus inviting applications for 200 000 ordinary shares to the public at an issue price of $4, payable as follows: $2 on application (due by closing date of 1 February 2020) $1 on allotment (due 31 March 2020) $1 on future call/calls to be determined by the directors By 1 February 2020, applications had been received for 250 000 ordinary shares of which applicants for 100 000 shares forwarded the full $4...
XYZ Corporation issued bonds on January 1, 2020 with a face value of $1,000, 10% stated...
XYZ Corporation issued bonds on January 1, 2020 with a face value of $1,000, 10% stated interest rate, with semi-annual payments, and a maturity date of December 31, 2024 (4 years). The market interest rate is 8%. Required: (Answers may be rounded to the nearest dollar) 1. Compute the market price of the bonds and the journal entry to record issuance of the bonds on January 1, 2020. 2. Record the journal entry for the first semi-annual interest payment on...
On March 1, 2014, Squeeks Corporation issued a $1 million face-value bond with 11% face interest...
On March 1, 2014, Squeeks Corporation issued a $1 million face-value bond with 11% face interest rate and a maturity of fifteen years. The semi- annual interest payments are made on March 1 and September 1. The bond was issued at such a price as to yield 9.6%. a. What was the issue price of the bond? b. Prepare the journal entry to record the sale of the bond on March 1, 2014.
On January 1, 2019, Hopkins Corporation issued bonds with a face value of $230,000,000 that pay...
On January 1, 2019, Hopkins Corporation issued bonds with a face value of $230,000,000 that pay interest on June 30th and December 31st. The coupon rate of the bonds is 8% while the effective rate is 10%. The bonds mature in 14 years. Hopkins' fiscal year ends on December 31st. Any discount/premium is to be amortized using the straight-line method. Required (if necessary, round calculations to the nearest dollar): 1. Calculate the present value of the bond. 2. Journalize the...
Johansson Corporation has issued 400,000 shares of $2 par value Ordinary shares. It authorized 600,000 shares....
Johansson Corporation has issued 400,000 shares of $2 par value Ordinary shares. It authorized 600,000 shares. The share premium on ordinary shares is $500,000. The corporation has reacquired 20,000 shares at a cost of $80,000 and is currently holding those shares. Treasury stock was reissued in prior years for $100,000 more than its cost. The company declared the issuance of a stock dividend of 10,000 shares. The corporation also has 5,000 shares issued and outstanding of 9%, $100 par value...
On January 1, 2019, Bradley, Inc., issued 12% bonds with a face amount of $66 million,...
On January 1, 2019, Bradley, Inc., issued 12% bonds with a face amount of $66 million, dated January 1. The bonds mature in 2040 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually. Instructions 1. Determine the price of the bonds at January 1, 2019, and prepare the journal entry to record their issuance by Bradley. 2. Assume the market rate was 8,5%. Determine the price of the bonds at January...
On January 1, 2019, Plywood Homes, Inc., issued 20-year, 4% bonds having a face value of...
On January 1, 2019, Plywood Homes, Inc., issued 20-year, 4% bonds having a face value of $1 million. The interest on the bonds is payable semiannually on June 30 and December 31. The proceeds to the company were $975,000 (i.e. on the day they were issued the bonds had a market value of $975,000). On June 30, 2019, the company’s fiscal closing date, when the bonds were being traded at 98.5, each of the following amounts was suggested as a...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT