A14-7 Share Retirement: On 1 January 20XS, BC Ventures Corp. reported the follow
ID: 2606317 • Letter: A
Question
A14-7 Share Retirement: On 1 January 20XS, BC Ventures Corp. reported the following in shareholders' equity: $386,000 Preferred shares, no-par value: $0.70, cumulative; authorized, unlimited shares; issued, 80,000 shares 642,000 Common shares, no-par value; authorized, unlimited shares; issued 80,000 shares Contributed capital on retirement of common shares Retained earnings AOCI for foreign exchange gains on foreign subsidiary 14,000 1,250,000 38,000 During 20X5, certain shares were reacquired. In accordance with the regulations in BC Ventures inco legislation, all reacquired shares were retired. Transactions were as follows: 15 January Bought 7,000 preferred shares for $5.20 per share 12 February Bought 2,000 common shares for $11 per share 25 February Bought 4,000 preferred shares for $4.00 per share 26 April Bought 5,000 preferred shares for $6.00 per shareExplanation / Answer
1.
b.
B C Venture Corp. Journal Entries for the year ended December 31, 20X5 Date Account Title Debit Credit 1/15/20X5 Prefered Stock 36400 Cash 36400 (7,000 shares of prefered stock reacquired @$5.20 per share) 2/12/20X5 Common Stock 22000 Cash 22000 (2,000 shares of common stock reacquired @$11.00 per share) 2/25/20X5 Prefered Stock 16000 Cash 16000 (4,000 shares of preferred stock reacquired @$4.00 per share) 4/26/20X5 Prefered Stock 30000 Cash 30000 (5,000 shares of preferred stock reacquired @$6.00 per share) 7/16/20X5 Common Stock 60000 Cash 60000 (8,000 shares of common stock reacquired @$7.50 per share) 7/30/20X5 Retained Earnings 27125 Common Stock 27125 (Stock dividend @ 5% on 70,000* shares of common stock @$7.75) 11/30/2015 Retained Earnings 73500 Cash dividend payable on common stock 73500 (Cash dividend @$1.00 per share on 73,500 ** shares of common stock) 11/30/2015 Retained Earnings 64000 Cash dividend payable on preferred stock 64000 (Cash dividend @$1.00 per share on 64,000 *** shares of preferred stock) Workings: Shares of common stock outstanding as at 30th July Number Value Number of shares outstanding as at January 1, 20X5 80000 642000 Shares reacquired and retired on 12th February -2000 -22000 Shares reacquired and retired on 16th July -8000 -60000 Number of shares outstanding as at 30th July * 70000 560000 Shares of common stock outstanding as at 30th November Number Value Number of orginal shares outstanding as at July 30, 20X5 70000 560000 Number of Stock Dividend shares issued on 30th July, 20X5 3500 27125 Number of shares outstanding as at 30th November ** 73500 587125 Shares of preferred stock outstanding as at 30th November Number Value Number of shares outstanding as at January 1, 20X5 80000 386000 Shares reacquired and retired on 15th January -7000 -36400 Shares reacquired and retired on 25th February -4000 -16000 Shares reacquired and retired on 26th April -5000 -30000 Number of shares outstanding as at 30th November *** 64000 303600