Lee Holdings Ltd. was incorporated on January 2, 2014 and on that date issued 50,000 common shares for cash at $1 each. On April 30, Lee issued 1,000 preferred, $3 cumulative preferred shares, convertible to common shares at the rate of 6 common shares for one preferred share. The preferred shares were issued for $18 each. On October 15, 600 of the preferred shares were converted to common shares. On that date, the market value was $1.50 for the common shares and $17.50 for the preferred shares. On December 15, 10,000 common shares were reacquired for $0.90 each.
Instructions
a. Journalize the share transactions described.
b. Calculate the number of issued shares and average cost per share of each class remaining at the end of the year.

Question

Quizplus · Accepted Answer

The Answer of Lee Holdings Ltd. was incorporated on January 2, 2014 and on that date issued 50,000 common shares for cash at $1 each. On April 30, Lee issued 1,000 preferred, $3 cumulative preferred shares, convertible to common shares at the rate of 6 common shares for one preferred share. The preferred shares were issued for $18 each. On October 15, 600 of the preferred shares were converted to common shares. On that date, the market value was $1.50 for the common shares and $17.50 for the preferred shares. On December 15, 10,000 common shares were reacquired for $0.90 each.
Instructions
a. Journalize the share transactions described.
b. Calculate the number of issued shares and average cost per share of each class remaining at the end of the year.