Question 1

How would the declaration of a 15% stock dividend affect each of the following?

Accepted Answer

The answer of How would the declaration of a 15%...

Question 2

Lump sum issuance of shares Bertram Corp.is authorized to issue 15,000 no par value common shares and 5,000 no par value preferred shares.On January 16, 2014, the corporation sold 50 common shares and 75 preferred shares for a lump sum of $18,000.The common were selling at $50 and the preferred at $100. Instructions Using the relative fair value method, prepare the entry to record the sale for cash.Show calculations.

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Question 3

How would total shareholders' equity be affected by the declaration of each of the following?

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Question 4

Emily Corp.owned shares in Carr Ltd.On December 1, 2014, Emily declared and distributed a property dividend of Carr shares when their fair value exceeded the carrying amount.As a consequence of the dividend declaration and distribution, the accounting effects Shareholders' Equity 15- 37 would be

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Question 5

A corporation declared a dividend, a portion of which was liquidating.How would this distribution affect each of the following?

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Question 6

An investment in marketable securities was distributed to shareholders as a property dividend.The dividend should be recorded at the

Accepted Answer

Property dividends should be recorded at the fair value of the asset transferred at the date of declaration.

Question 7

Reacquisition of shares Norway Corp.originally sold 1,000,000 of its no par common shares at $13 a share.Later, Norway bought back 6,000 shares of these shares at $17 a share.Norway is incorporated under the CBCA and therefore retired these shares. Instructions Record the retirement of the shares.

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Question 8

At December 31, 2013 and 2014, Gee Corp.had outstanding 3,000 no par value, $8, cumulative preferred shares and 10,000 no par value common shares.At December 31, 2013, dividends in arrears on the preferred shares were $12,000.Cash dividends declared in 2014 totalled $45,000.What amounts were payable on each class of shares?

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Question 9

On December 1, 2014, Dee Ltd.agreed to sell 40,000 of their no par common shares on a subscription basis.On that day, 25% of the subscription price was collected as a down payment, with the remaining 75% due in 2015.On the December 31, 2014 statement of financial position, the shareholders' equity section would report

Accepted Answer

The shares are subscribed but not fully paid; thus, they are reported as subscribed shares with a receivable for the unpaid portion.

Question 10

Stock dividends Describe the accounting treatment for the declaration of a common stock dividend.

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Question 11

On May 1, 2014, when the market value of Jay Ltd.'s common shares was $15 per share, the corporation had 100,000 no par value common shares issued and outstanding.On this day, Jay declared and issued a 15% common stock dividend.As a result of this stock dividend, Jay's total shareholders' equity

Accepted Answer

A stock dividend does not change the total shareholders' equity; it only reallocates amounts within equity.

Question 12

On July 1, 2014, Cee Corp.issued 1,000 of its no par common shares and 2,000 of its no par preferred shares for a lump sum of $100,000.At this date Cee's common shares were selling for $48 per share and the preferred shares for $36 per share.Using the relative fair value method, the amount of the proceeds allocated to the preferred shares account should be

Accepted Answer

The relative fair value method allocates the lump sum based on the proportion of the fair value of each type of share. The total fair value is (1,000 x $48) + (2,000 x $36) = $48,000 + $72,000 = $120,000. The proportion for preferred shares is $72,000/$120,000 = 0.6. Therefore, the proceeds allocated to preferred shares is 0.6 x $100,000 = $60,000.

Question 13

Items affecting retained earnings What are the items that increase or decrease retained earnings?

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Question 14

Use the following information for questions. The following data are provided for Croatia Corp.'s last two fiscal years:  Shareholders' Equity 15- 27 Additional information: On May 1, 2015, 6,000 common shares were issued.Although dividends had been declared regularly up to December 31, 2014, preferred dividends were NOT declared during 2015.The market price of the common shares was $100 at December 31, 2015.
-The December 31, 2014 condensed balance sheet of Bee Services, a proprietorship, follows:  On January 1, 2015, Bee Services was incorporated as Bee-Line Ltd., with 10,000 no par value common shares issued.How much should be credited to Common Shares?

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Question 15

Eye Corp.owned 20,000 shares of Lash Corp., which had been purchased in 2010 for $300,000.On December 15, 2014, Eye declared a property dividend of all of its Lash Corp. shares.The property dividend was distributed on January 15, 2015.On the declaration date, the fair value of Eye's investment in Lash was $400,000.The entry to record the declaration of the dividend would include a debit to Retained Earnings of

Accepted Answer

The entry to record the declaration of a property dividend should reflect the fair value of the asset being distributed. Therefore, Retained Earnings is debited by the fair value of the investment, which is $400,000.

Question 16

The dollar amount of a cash dividend to be paid is determined on the date of

Accepted Answer

The declaration date is when the company publicly announces that they will be paying a cash dividend and specifies the amount. Therefore, the dollar amount of a cash dividend to be paid is determined on the declaration date.

Question 17

Share subscriptions On April 28, 2014, Sweden Inc.accepted subscriptions for 10,000 of its no par value common shares.At this time, the shares were selling for $45 each.A 40% down payment was received with the remainder due in six months.On October 28, 2014 the balance of the subscription price was received and the shares were issued. Instructions
a.Prepare the journal entries required on April 28, 2014.
b.Prepare the journal entries required on October 28, 2014.

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Question 18

Shares issued in noncash transactions What are the different bases for share valuation when assets other than cash are received for issued shares?

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Question 19

Eff Ltd.was organized on January 2, 2014, with 100,000 no par value common shares authorized.During 2014, Eff had the following capital transactions: Jan 5 Issued 75,000 shares at $14 per share Jul 27 Purchased and retired 5,000 shares at $10 per share Nov 25 Issued 4,000 shares at $13 per share What would be the balance in the Contributed Surplus account at December 31, 2014?

Accepted Answer

Contributed Surplus = Share Premium - Treasury Stock= (75,000 x $4) + (4,000 x $3) = $20,000

Question 20

Shareholders' Equity Indicate the effect of each of the following transactions on total shareholders' equity by placing an "X" in the appropriate column.

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Quiz 2: Intermediate Accounting Volume 2