Reference no: EM133053462
Questions -
Q1. Harly Company has the following information about the shareholders' equity accounts as of December 31, 2021: 6% Preference shares, $10 par - $200,000; Ordinary shares, $10 par - $300,000; Accumulated profits - $80,000. Dividends have not been declared for the years 2019 to 2021. The whole amount of the accumulated profits of $80,000 was declared as dividend on December 31, 2021. What is the dividend per share that an ordinary shareholder have if the preference share is cumulative and participating up to 21%?
Q2. During 2021, Cara Corporation had 2 classes of shares issued and outstanding for the entire year. Additional data are as follows: Ordinary share capital, par $10 - $1,000,000; 7% Preference share capital, $100 par, cumulative - $500,000. The net income for the year is $500,000. How much is the basic earnings per share?
Q3. On January 1, 2021, Beat Corporation offered its top management share appreciation right with the following terms:
Predetermined price - $100/share
Number of shares - 50,000 shares
Service period - 3 years
Exercise date January 1, 2024
The share appreciation right is to be exercised on January 1, 2024. The quoted prices per share are $100, $124, $151 and $151 on January 1, 2021, December 31, 2021, December 31, 2022, December 31, 2023, respectively.
How much must Beat charge to compensation expense for the year December 31, 2023 from the share appreciation right?
Q4. The following data was acquired from Iza Corporation:
- Dividends on its 50,000 shares of 10%, $100 par value cumulative preference share capital have not been declared or paid for 3 years.
- Treasury ordinary shares were acquired at a cost of $1,000,000 during the year. The treasury share had not been reissued as of year-end.
- At year-end, Iza appropriated $3,000,000 of retained earnings for the construction of a new plant.
- Also, $2,000,000 of cash was restricted for the retirement of bonds payable due in the next year.
How much of retained earnings must be appropriated as a result of the given transactions?
Q5. Bolive Company needs to undergo a quasi- reorganization on December 31, 2021. The following data may be relevant in accounting for it:
a. Inventory with a fair value of $1,000,000 is currently recorded in the accounts at its cost of $1,500,000.
b. Plant assets with a fair value of $3,000,000 are currently recorded at $4,000,000, net of accumulated depreciation.
c. Unrecorded accounts payable amount to $300,000
d. Individual shareholders contribute $1,500,000 to create additional paid-in capital to facilitate the reorganization. No new shares pass to the company's shareholders.
e. The par value of the share capital is reduced from $100 to $50.
f. Immediately before these events, the shareholders' equity section appears as follows:
Share capital, $100 par value, 50,000 shares - $5,000,000
Share premium - 500,000
Retained earnings (deficit) - (2,000,000)
How much is the total shareholders' equity after the quasi-reorganization?