Question 1
The following information was obtained from Geneveraux Corporation records on December 31, 2017. Geneveraux uses dividends accounts to record dividend declarations and income summary accounts.
Preferred Shares, $2 cumulative*, 25,000 shares authorized, 22,000 shares issued and outstanding $738,000
Common Shares, unlimited authorization, 60,000 shares issued and outstanding $900,000
Retained Earnings $560,000
*2016 and 2017 dividends in arrears
Required:
1. Prepare journal entries for the following selected transactions during 2018. Jan. 14 Declared a $150,000 cash dividend, payable on March 1 to the shareholders of record on January 31. (indicate the amount payable to each class of shareholder)
Mar. 1 Paid the cash dividends declared on Jan. 14
Apr. 30 Declared a 10% share dividend on the common shares distributable June 1 to
the shareholders of record on May 15. Market value was $15.00 on Apr. 30.
June 1 Distributed the share dividend declared on April 30
Aug. 31 Issued 6,000 shares of the company’s common shares at $18.00 per share.
Nov. 20 Issued 1,000 preferred shares at $36 per share.
Dec. 31 Reported profit of $278,000. Close the income summary account.
2. Prepare the Statement of Changes in Shareholders’ Equity for 2018.
Statement of Changes in Equity
3. Prepare the shareholders’ equity section of the balance sheet at December 31, 2018.
Question 2
Genius Corporation had net income of $33,000 and paid preferred dividends of $6,500. Quantum had 10,000 common shares outstanding.
Required:
Calculate the earnings per share.
Question 3
Quinn Inc. reported $305,000 profit in 2020 and declared preferred dividends of $45,000. The following changes in common shares outstanding occurred during the year:
Jan. 1 45,000 common shares were outstanding
Jun. 30 Sold 22,000 common shares.
Sep. 1 Declared and issued a 10% common share dividend
Nov. 2 Sold 12,500 common shares.
Required:
Calculate the weighted-average number of common shares outstanding during the year and earnings per share. (Round EPS calculations to two decimal places.)
Question 4
On July 31, 2020, Pam Corporation sold 10,000 common shares at $25 per share cash.
Required: Prepare the journal entry to record the issuance of the shares.
Question 5
Adam Corporation received its charter and began business in 2020. On January 3, 2020, the company issued 750 common shares in exchange for legal services and promoters fees worth $8,600 relating to the organization of the corporation. Required: Prepare the journal entry to record the issuance of the shares.
