Reference no: EM132928648
Questions -
Q1. On May 30, 2020, Rose Hill Corporation accepted subscriptions for 10,000 common shares. On that date, the shares were selling for $30 each. Subscribers paid 40% down and must pay the remainder in six months. On September 30, 2020, the balance of the subscription price was received, and the shares were issued.
Instructions - Make all journal entries related to the share subscriptions.
Q2. Sahali Corp. issued 1,000,000 common shares at $13 a share during April 2014. On September 23, 2020, Sahali repurchased 50,000 shares for $17 a share.
Sahali is incorporated under the CBCA and therefore retired these shares.
Instructions - Prepare the journal entry to record the repurchase of the shares.
Q3. In each of the following independent cases, it is assumed that the corporation has outstanding 20,000, $0.80, preferred shares, with a carrying value of $200,000, and 80,000 common shares, with a carrying value of $800,000.
You must show your work. Clearly label your calculations, and clearly label your answer and highlight it with bold print. Correct answers without showing how you arrived at the solution will receive only part marks.
Instructions -
A. Assume that the preferred dividends are cumulative and non-participating, and preferred dividends are paid up to date through 2019. At December 31, 2020, the board of directors wants to distribute $125,000 in dividends. How much will the preferred shareholders receive?
B. Assume that the preferred dividends are cumulative and non-participating. Although dividends have been paid regularly up to 2017, no dividends were declared in 2018 or 2019. At December 31, 2020, the board of directors wants to distribute $200,000 in dividends. How much will the preferred shareholders receive?
C. Assume that the preferred dividends are cumulative and fully participating. Although dividends have been paid regularly up to 2017, no dividends were declared in 2018 or 2019. At December 31, 2020, the board of directors wants to distribute $200,000 in dividends. How much will the preferred shareholders receive?
Q4. Rayleigh Corporation started 2020 with 600,000 common shares outstanding. Rayleigh follows IFRS. During 2020, Rayleigh completed the following share transactions:
June 30: Repurchased 100,000 shares
July 31: Issued 200,000 shares
August 31: 2 for 1 stock split
October 31: Issued 200,000 shares
Instructions - Calculate the weighted average number of shares outstanding for 2020. Use a table to show your calculations. Clearly indicate your final answer.