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FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cullumber Corp. had the following shareholders' equity on January 1, 2023: Common shares, unlimited number authorized, 100,000 shares issued and outstanding Contributed surplus Retained earnings Total shareholders' equity The following transactions occurred, in the order given, during 2023: 1. The contributed surplus arose from net excess of proceeds over cost on a previous cancellation of common shares. Cullumber prepares financial statements in accordance with ASPE. 2. 3. 4. $290,000 302,000 5. 2,430,000 $3,022,000 Subscriptions were sold for 12,000 common shares at $26 per share. The first payment was for $10 per share. The second payment for the sale in item 1 above was for $16 per share. All payments were received on the second payment except for 2,000 shares. In accordance with the subscription contract, which requires that defaulting subscribers have all their payments refunded, refund cheques were sent to the defaulting subscribers. At this point, common shares were issued to subscribers who had fully paid on the contract. Repurchased 22,000 common shares at $29 per share. They were then retired. Sold 4,800 preferred shares and 3,700 common shares together for $301,000. The common shares had a fair value of $31 per share.
Transcribed Image Text:Cullumber Corp. had the following shareholders' equity on January 1, 2023: Common shares, unlimited number authorized, 100,000 shares issued and outstanding Contributed surplus Retained earnings Total shareholders' equity The following transactions occurred, in the order given, during 2023: 1. The contributed surplus arose from net excess of proceeds over cost on a previous cancellation of common shares. Cullumber prepares financial statements in accordance with ASPE. 2. 3. 4. $290,000 302,000 5. 2,430,000 $3,022,000 Subscriptions were sold for 12,000 common shares at $26 per share. The first payment was for $10 per share. The second payment for the sale in item 1 above was for $16 per share. All payments were received on the second payment except for 2,000 shares. In accordance with the subscription contract, which requires that defaulting subscribers have all their payments refunded, refund cheques were sent to the defaulting subscribers. At this point, common shares were issued to subscribers who had fully paid on the contract. Repurchased 22,000 common shares at $29 per share. They were then retired. Sold 4,800 preferred shares and 3,700 common shares together for $301,000. The common shares had a fair value of $31 per share.
Prepare the journal entries to record the transactions for the company for 2023. (List all debit entries before credit entries. 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 O for the amounts. Round average share price to 2 decimal places, 5.27 and final answers to O decimal places, e.g. 5,275.) No. Account Titles and Explanation 1. 2. 3. Cash 4. Share Subscriptions Receivable Common Shares Subscribed Cash Share Subscriptions Receivable Common Shares Subscribed Share Subscriptions Receivable Cash (To record refund to defaulting subscribers) Show Transcribed Text (To issue shares fully paid on subscriptions) Common Shares Contributed Surplus Retained Earnings Cash 5. Cash Preferred Shares Common Shares Debit 120000 192000 Credit 312000 0000000
Transcribed Image Text:Prepare the journal entries to record the transactions for the company for 2023. (List all debit entries before credit entries. 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 O for the amounts. Round average share price to 2 decimal places, 5.27 and final answers to O decimal places, e.g. 5,275.) No. Account Titles and Explanation 1. 2. 3. Cash 4. Share Subscriptions Receivable Common Shares Subscribed Cash Share Subscriptions Receivable Common Shares Subscribed Share Subscriptions Receivable Cash (To record refund to defaulting subscribers) Show Transcribed Text (To issue shares fully paid on subscriptions) Common Shares Contributed Surplus Retained Earnings Cash 5. Cash Preferred Shares Common Shares Debit 120000 192000 Credit 312000 0000000
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