Reference no: EM133060512
Questions -
Q1. On January 1, 2021, Mariah Company's shareholders' equity comprised of $5,000,000 share capital, par $100, $3,000,000 of share premium and retained earnings of $1,500,000. During the year, Mariah had the following selected transactions in chronological order:
-Corrected overstatement of 2020 net income because of depreciation error, $50,000
-Share dividend of 15% was declared and issued when the shares are selling at $120 per share.
-Declared a cash dividend of $1.75 per share
-Net income for the year amounts to P850,000
How much is the retained earnings balance on December 31, 2021?
Q2. At the start of the current year, Somi Corporation has issued and outstanding shares total 100,000 shares of $10 par value, Share Premium of $400,000 and Retained Earnings of $360,000. The following transactions occurred during the year:
January 10 - Sold 40,000 shares at $15 per share
March 27 - Purchased 5,000 treasury shares at a cost of $12 per share.
October 31 - Issued $5,000,000 convertible bonds at 120.The bonds are quoted at 98 without the conversion feature.
November 10 - Declared a 2 for 1 split when the market value of the share was $16. December 15 - Sold 20,000 shares at $10 per share.
December 31 - Net income for the year was $550,000
How much is the total shareholders' equity at year-end?
Q3. Selly Company embarked on a promotional program whereby a cup costing $13 each is given away for 10 bottle crowns plus $5. Selly also pays $2 per cup for handling and shipping cost. Selly estimates that only 40% of the bottle crowns in the hands of consumers will be presented for redemption. The following data is available: Bottles sold - 1,000,000 units amounting to $5,000,000; Can openers bought for giveaways - 15,000 units amounting to $195,000; Can openers distributed to customers - 10,000 units. At the end of the first year, what amount must Selly recognize as estimated liability for promotional items outstanding?
Q4. The following data is the capital structure of Try Corporation on December 31, 2020:
-12% Preference shares, $200 par, 15,000 shares issued and outstanding - $3,000,000
-Ordinary shares, $30 par, 250,000 shares issued and outstanding - 7,500,000
-Share premium, preference - 900,000
-Share premium, ordinary - 750,000
-Retained earnings - 2,100,000
These transactions related to shareholders' equity were noted in 2021:
-Purchased and retired 2,000 preference shares at $280 each
-Purchased 30,000 of its own ordinary shares at $35 per share
-Reissued 5,000 treasury shares at $38 per share.
-Shareholders donated to the company 20,000 ordinary shares when the market price is $36 per share.
-1/2 of the donated shares were issued for $39 each.
-Profit for 2021 was $1,850,000
The Board of Directors declared and paid the regular annual dividend on the preference shares and $1.50 dividend per ordinary share.
a. What is the total shareholders' equity at December 31, 2021?
14,500,000
14,250,000
14,453,500
14,435,500
b. How much is the total amount of dividends on preference and ordinary shares?
312,000
322,500
687,000
634,500
d. What is the number of ordinary shares issued and outstanding respectively as of December 31, 2021?
285,000 and 250,000
250,000 and 215,000
215,000 and 250,000
250,000 and 285,000