Problem 11-2A (Hi the question as it is from book of accounting page 629 ( finan
ID: 2596081 • 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)
(a) Record the above transactions for 2018, including any required entries to close dividends declared and net income. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round average cost per share to 2 decimal palces, e.g. 2.25 and final answers to 0 decimal places.)
(b) Open T accounts and post to the shareholders’ equity accounts. (Record entries in the order presented in the problem.)
(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)
remmers 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 1,000,000 common shares for $2 per share. Mar. 1 Issued 20,000 preferred shares for $50 per share. May 1 Issued 250,000 common shares for $3 per share. June 1 Reacquired and retired 10,000 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 33,500 common shares for $120,000 cash and used equipment. The equipment originally cost $30,000. It now has a carrying amount of $15,000 and a current value of $16,000. The common shares were trading for $4 per share on this date. Sept. 4 Issued 10,000 common shares for $5 per share. Nov. 1 Issued 4,000 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 $72,000 cash dividend to the preferred shareholders, to shareholders of record on December 31, payable on January 10. 31 Reported net income of $1,300,000 for the year.Explanation / Answer
ENTRIES Date Particulars Debit Credit Jan. 10 Cash (1000000 x $2) 2000000 Common shares 2000000 (To record issue of common shares) Mar. 1 Cash (20000 x $50) 1000000 Preferred shares 1000000 (To record issue of preferred shares) May. 1 Cash (250000 x $3) 750000 Common shares 750000 (To record issue of common shares) June. 1 Common shares(10000x$2) 20000 Cash 20000 (To record retired of common shares) Jul. 24 Cash 120000 Equipment 16000 Common shares 132000 (To record issue of common shares) Sep. 1 Cash (10000 x $5) 50000 Common shares 50000 (To record issue of common shares) Nov. 1 Cash (4000 x $50) 200000 Preferred shares 200000 (To record issue of preferred shares) Nov. 20 Common shares(15000x$4) 60000 Cash 60000 (To record retired of common shares) Dec. 15 Cash dividends 72000 Cash dividends payable 72000 (To record declaration of preferred dividends) Closing Entries: Dec. 31 Retained earnings 72000 Cash dividends 72000 (To close cash dividends) Dec. 31 Income summary 1300000 Retained earnings 1300000 (To close profit) Note: The equipment has been recorded at its Current value since the same is available. Preferred Shares Mar. 1 1000000 Nov. 1 200000 Dec. 31 Bal. 1200000 Common Shares June. 1 20000 Jan. 10 2000000 Nov. 20 60000 May. 1 750000 Jul. 24 132000 Sep. 1 50000 Dec. 31 Bal. 2852000 Cash Dividends Dec. 15 72000 Dec. 31 72000 Dec. 31 Bal. 0 Retained Earnings Dec. 31 CE 72000 Dec. 31 CE 1300000 Dec. 31 Bal. 1228000 REMMERS CORPORATION Statement of Financial Position (Partial) At 12/31/2018 Shareholders' Equity Share Capital Preferred Shares 1200000 Common Shares 2852000 Total Share Capital 4052000 Retained Earnings 1228000 Total Shareholders' Equity 5280000