2293 Chapter 11 Assign Solution 292[1]

2293 Chapter 11 Assign Solution 292[1] - $117,600 c) The...

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11-24 a) 1. Cash (A) 220,000 Preferred shares (SE) 60,000 Common Shares (SE) 160,000 2. Land (A) 90,000 Common Shares 90,000 3. Income summary (SE) 75,000 Retained earnings (SE) 75,000 5. Preferred dividends declared (SE) (2,000 x $3.00) 6,000 Preferred Dividends Payable 6,000 Dividends declared (SE) (11,000 x $4.00) 44,000 Dividends payable (L) 44,000 6. Preferred Dividends Payable 6,000 Common Dividends Payable 44,000 Cash 50,000 7. A 10% stock dividend is declared and distributed on the common shares: Dividends declared (SE) (11,000 x 10% x $24.0) 26,400 Common shares (SE) (11,000 x 10% x $24.00) 26,400 8. Preferred dividends declared (SE) (2,000 x $3.00) 6,000 Cash 6,000 9. Income summary (SE) 125,000 Retained earnings (SE) 125,000 b) $3, Preferred shares (2,000 issued and 60,000 outstanding, 50,000 authorized) Common shares (12,100 issued, $276,400 and outstanding, unlimited authorized) Retained earnings * 117,600
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Total shareholders’ equity $454,000 * $75,000 – 6,000 – 44,000 +125,000 – 6,000-26400 =
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Unformatted text preview: $117,600 c) The owners would have designated the preferred shares as non-voting in order to maintain control over the corporation. That is, in order to maintain the initial shared control structure resulting from the original common share issuance to the owners (each with 25% control). 11-31 a. Preferred Common Total 2006 750,000 2007 750,000 2008 750,000 2,750,000 5,000,000 b. Total dividend / # shares = $2,750,000/750,000 = $3.67 c. The entry for the stock dividend would be Stock dividends declared (SE) 4,425,000 Common shares (SE) 4,425,000 (750,000 x 10% x $59) This would reduce the companys retained earnings and increase the share capital by increasing the common shares. The total dollar amount of shareholders equity would remain unchanged. d. The company could use the issuance of shares instead of cash as a way of satisfying their shareholders request for dividends while conserving their cash....
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This note was uploaded on 09/25/2010 for the course FMGT FMGT 2293 taught by Professor Hamere. during the Summer '09 term at Langara.

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2293 Chapter 11 Assign Solution 292[1] - $117,600 c) The...

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