View Policies Current Attempt in Progress Taylor Corporation issues 20,000 shares of $50 par value preferred stock for cash at $90 per share. In the stockholders' equity section, the effects of the transaction above will be reported O entirely within the capital stock section. O entirely within the additional paid-in capital section. O under both the capital stock and additional paid-in capital sections. O entirely under the retained earnings section. eTextbook and Media Save for Later Attempts: 0 of 2 used Submit Answer

View Policies Current Attempt in Progress Taylor Corporation issues 20,000 shares of $50 par value preferred stock for cash at $90 per share. In the stockholders' equity section, the effects of the transaction above will be reported O entirely within the capital stock section. O entirely within the additional paid-in capital section. O under both the capital stock and additional paid-in capital sections. O entirely under the retained earnings section. eTextbook and Media Save for Later Attempts: 0 of 2 used Submit Answer

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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PROBLEM 1 The following data were compiled prior to preparing statement of financial position of the Conviction Corporation:Authorized share capital, P100 par value P 4,000,000Unissued share capital 800,000Subscribed share capital 480,000Subscriptions receivable `120,000Premium on share capital 320,000Premium on bonds payable 240,000Gain on sale of treasury shares 80,000Donated capital 800,000Share warrants outstanding 200,000Reserve for bond sinking fund 400,000Reserve for depreciation 600,000Treasury shares, at cost 144,000Retained earnings, unappropriated 720,000Cash dividends payable 160,000Revaluation increment on property 800,000Net unrealized loss on financial assetsat fair value through OCI 96,000 1. What is the total share premium? 2. What is the total contributed capital? 3. What is the total appropriated earnings?
PROBLEM 1 The following data were compiled prior to preparing statement of financial position of the Conviction Corporation:Authorized share capital, P100 par value P 4,000,000Unissued share capital 800,000Subscribed share capital 480,000Subscriptions receivable `120,000Premium on share capital 320,000Premium on bonds payable 240,000Gain on sale of treasury shares 80,000Donated capital 800,000Share warrants outstanding 200,000Reserve for bond sinking fund 400,000Reserve for depreciation 600,000Treasury shares, at cost 144,000Retained earnings, unappropriated 720,000Cash dividends payable 160,000Revaluation increment on property 800,000Net unrealized loss on financial assetsat fair value through OCI 96,000 1. What is the total legal capital? 2. What is the total shareholders’ equity?
View Policies Current Attempt in Progress If Marigold Company issues 8800 shares of $5 par value common stock for $160600, the account O Cash will be debited for $116600. O Paid-in Capital in Excess of Par will be credited for $44000. O Common Stock will be credited for $44000. Paid-in Capital in Excess of Par will be credited for $160600. Save for Later Attempts: 0 of 1 used Submit Answer
EXERCISE 6 The Conception Enterprises, Inc. had the following shareholder's equity balances at December 31,2020: Preference Share Capital, P 20 par, 100, 000 shares authorized P 2,000,000 Ordinary Share Capital, P 30 par, 100, 000 shares authorized P 1,800,000 Share Premium- Preference Share 160,000 Share Premium- Ordinary Share 250,000 Retained Earnings 800,000 The preference share is convertible into ordinary share. REQUIRED: Journalize the conversion of 10,000 preference shares under each of the following independent assumptions: a.) Preference share is convertible into ordinary shares on a share basis. b.) 2 shares of preference are convertible into one ordinary share.
QUESTION TWO B plc has the following capital structure: K’000Ordinary shares – K0.40 5,000 Retained earnings 500 10% Preference shares at K1 1,500 10% K100 redeemable debentures 3,000 Total funds employed 10,000 The market price of the preference shares is 80n ex-div, the ordinary shares are quoted at K1.62 cum-div per share. Debenture stock is quoted at K97.5 ex-interest per K100 nominal and will be redeemable at par in exactly 7 years’ time. B plc has just declared dividend of K1,500,000 in total for all issued ordinary shares. The dividend growth rate is 4% per year forever. Company tax is 30% per year. The market rate of return is 12% and the company has an equity beta value of 1.25 Required:a) Calculate WACC based on market values. b) Discuss the implications of using a wrong WACC value in project appraisal and comment on the current level of capital gearing.
Question 1 The following information relates to a company listed on Luse- Mungwi PLC ZMK Issued share capital (1000 shares) Share premium. Reserves. Share holders funds. 6% Irredeemable Debentures. 9% Redeemable Debentures. Bank loan. Total Long Term Liabilities. Million 4 000 2 600 290 6,890 2,800 2,900 1 000 6 700 The current cum interest market value per k100 units is k103 and k105 fir the 6% and 9% Debentures respectively. The 9% Debenture is redeemable at par in 10 years time. The bank loan bears interest rate of 2% above the base rate (current base rate is 15%). The current ex-div market price of shares is k1, 100 and a dividend of K100 per share which is expected to grow at a rate of 5% per year has just been paid. The effective corporation tax rate for Mungwi is 30%. Required: A) Calculate the effective after tax weighted Average Cost of Capital (WACC) fir Mungwi PLC
Question 1 The Paid in Capital Section of the Stockholders Equity section is as follows: = = 100,000 Common Stock, Par Value $2.00; Authorized 100,000 shs, Issued and Outstanding 50,000 shares The Board of Directors believes that the current Market Price of $50.00 per share is too high and is detracting from investors buying the shares. The Board Declared a 2:1 Stock Split. REQUIRED: 1) What is the effect of the stock split on the Common Shares ? List all items effected by the stock split. Par Value; - Issued and Outstanding Shares Market Price of the Shares - Common Stock balance after the split on the Paid in Capital section ?
Exercise 5. Various share capital transactions Joshua Company has two classes of share capital outstanding: 10%, P50 par preference share capital and P10 par ordinary share capital. At December 31, 2019, the following accounts were included in the shareholder's equity: Preference Share Capital, 100,000 shares Ordinary Share Capital, 1,000,000 shares Preference Share Premium P5,000,000 Ordinary Share Premium P10,000,000 Retained Earnings P4,500,000 The following transactions have affected the shareholder's equity of the company during the year 2020: Jan. 1 Issued 15,000 preference shares at P60 per share. Feb.1 Issued 25,000 ordinary shares at P25 per share. July 1 Reacquired 20,000 ordinary shares at P14 per share. Oct. 31 Reissued 15,000 treasury shares at P16 per share. Dec.31 Profit for the year is P2,500,000. Prepare the journal entries of the foregoing transactions and prepare the Shareholder's equity section of the Company as of December 31, 2020.
Problem 2 On January 1, 2021, the shareholders' equity section of Bamboo Corporation's statement of financial position disclosed the following information: 12.5% convertible preference shares (P40 par value; 150,000 shares authorized, 60,000 shares issued and outstanding) Ordinary shares (P5 par value; 600,000 shares authorized, 360,000 shares issued and outstanding). Share premium.. Retained earnings. Total shareholders' equity. 2.400,000.00 .1,800,000.00 .9,000,000.00 13,500,000.00 26,700,000.00 The following equity transactions occurred during 2021 and 2022: On February 1, 2021, 45,000 ordinary shares were acquired by the company for P33 per share. On August 30, 2021, 15,000 preference shares were converted to ordinary shares. One (1) preference share is convertible into one (1) ordinary share. At the time of conversion, the ordinary shares had a market value of P42 per share. On December 12, 2021, the company placed a share subscription of 30,000 ordinary shares at a subscription…
E 36-3 - Computation of basic EPS; with retrospe Miming Corp. had the following capital structure during 2020 and 2021: Preference share capital, P100 par, 10% cumulative, 100,000 shares Ordinary share capital, P100 par, 400,000 shares P10,000,000 40,000,000 Miming reported profit of P8,000,000 for the year ended Dec. 31, 2021. Miming paid no preference share dividends during 2020 and paid P1,500,000 preference share dividends in 2021. On Jan. 31, 2022, prior to the date that the 2021 financial statements are authorized for issue, Miming distributed 10% ordinary share dividend. Required: Compute the basic EPS to be presented in Miming Corp.'s statement of profit or loss for the year ended Dec. 31, 2021. E 36-4 - Computation of basic and diluted EPS; convertible instruments Kate Corp. had 200,000 ordinary shares, 20,000 convertible preference shares, and P1,000,000 of outstanding during 2021. The preference share is convertible into 40,000 ordinary shares. During 2021, Kate paid…
6. Pre-Financing Post-Financing Security # of Shares % # of Shares % Common-Founders 7,750,000 77.5 7,750,000 51.7 Common Employee Stock Pool 2,250,000 22.5 2,250,000 15.0 Issued 300,000 3.0 300,000 2.0 Unissued 1,950,000 19.5 1,950,000 13.0 Series A Preferred 0 0.0 5,000,000 33.3 Total 10,000,000 100 15,000,000 100 Series A VC specified the following security in the term sheet. "PCPC with participation as-if 5M shares of common, with liquidation return capped at four times OPP, and with the liquidation preference of 1X." A. Show the exit diagram with all values indicated in the diagram, i.e., inflection point when slope changes and conversion conditions. Show what x-axis and y-axis represent. B. suppose the portfolio company is acquired at an exit value of $35M. How much is the share of founder and Series A investor?
Exercise 19-19 (Algo) EPS; stock dividend; nonconvertible preferred stock; treasury shares; shares sold; stock options; convertible bonds [LO19-5,19-6, 19-7, 19-8, 19-9] On December 31, 2020, Berclair Inc. had 280 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2021. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2021, was $250 million. The income tax rate is 25%. Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2016. The options are exercisable as of September 13, 2020, for 30 million common shares at an exercise price of $56 per share. During 2021, the market price of the common shares averaged $70 per share. In 2017, $50.0 million of 8% bonds, convertible into…