Reference no: EM133075086
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. 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?
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 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