Problem 11-2A (Hi the question as it is from book of accounting page 629 ( finan
ID: 2594412 • Letter: P
Question
Problem 11-2A (Hi the question as it is from book of accounting page 629 ( financial accounting tools for business descion making kimmel)
Problem 11-2A)
(
Date
Account Titles and Explanation
Debit
Credit
Date
Account Titles and Explanation
Debit
Credit
Dec. 31
(To close cash dividends)
Dec. 31
.
(c) Prepare the shareholders’ equity section of the statement of financial position at December 31. (Enter account name only and do not provide descriptive information.)
Problem 11-2A (Hi the question as it is from book of accounting page 629 ( financial accounting tools for business descion making kimmel)
Problem 11-2A)
Pembina Corporation, a publicly traded company, was organized on January 1, 2018. It is authorized to issue an unlimited number of $3 noncumulative preferred shares and an unlimited number of common shares. The following share transactions were completed during the company’s first year of operations: Jan. 10 Issued 1,030,000 common shares for $2 per share. Mar. 1 Issued 20,000 preferred shares for $50 per share. May 1 Issued 257,500 common shares for $3 per share. June 1 Reacquired and retired 9,000 common shares at $2 per share. Determine the average cost of each reacquired share to the nearest cent before recording this transaction. July 24 Issued 30,700 common shares for $110,000 cash and used equipment. The equipment originally cost $27,000. It now has a carrying amount of $13,500 and a current value of $14,500. The common shares were trading for $4 per share on this date. Sept. 4 Issued 11,000 common shares for $5 per share. Nov. 1 Issued 3,900 preferred shares for $50 per share. 20 Reacquired and retired 15,000 common shares at $4 per share. Determine the average cost of each reacquired share to the nearest cent before recording this transaction. Dec. 14 Declared a $77,000 cash dividend to the preferred shareholders, to shareholders of record on December 31, payable on January 10. 31 Reported net income of $1,180,000 for the year.Explanation / Answer
Pembina Corporation Date Debit Credit 10/01/2018 Bank 2060000 Common Shares 1030000 1030000 2 Share Premium 1030000 (1030000 Common Shares issued at a premium of $1/share) 01/03/2018 Bank 1000000 20000 50 Non-cumulative Preferred Shares 60000 Share Premium 940000 (20000 non-cumulative Preferred Shares of $3 each issued at a premium of $47 per share) 01/05/2018 Bank 772500 257500 3 Common Shares 257500 Share Premium 515000 (257500 Common Shares issued at a premium of $2 per share) 01/06/2018 Common Shares 9000 9000 2 Share Premium 9000 Bank 18000 (Re-acquisition and retirement of 9000 Common Shares at a premium of $1/share) 24/07/2018 Bank 110000 30700 4 Equipment 14500 Common Shares 30700 Share Premium 93800 30700 124500 124500 (Issue of 30700 Common Shares at a premium of $3/share partly for cash and partly for used equipment having a fair value of $14500) 04/09/2018 Bank 55000 11000 5 Common Shares 11000 Share Premium 44000 (11000 Common Shares issued at a premium of $4/share) 01/11/2018 Bank 195000 3900 50 Non-cumulative Preferred Shares 11700 Share Premium 183300 47 (3900 non-cumulative Preferred Shares issued at a premium of $47/share) 20/11/2018 Common Shares 15000 15000 4 Share Premium 45000 Bank 60000 (Reacquisition and retirement of 15000 Common Shares at $4/share) 14/12/2018 Profit and loss account 77000 Preferred Dividends 77000 (Preference dividends declared appropriated from Profit and loss account) 31/12/2018 Reported net income of $1180000 for the year No entry required b. T-Accounts Common Shares 10/01/2018 Bank 1030000 01/05/2018 Bank 257500 01/06/2018 Bank 9000 24/07/2018 Bank 14500 Equipment 30700 04/09/2018 Bank 11000 20/11/2018 Bank 15000 24000 1343700 1319700 Non-cumulative Preferred Shares 01/03/2018 Bank 60000 01/11/2018 Bank 11700 71700 Statement of financial position as at 31/12/2018 Owners' Equity 1319700 Common Shares at $1 each 1319700 71700 Non-cumulative Preference Shares @ $3 each 215100 Share Premium 2521000 1030000 940000 515000 -9000 45000 2521000