At January 1, 2015, Bohemia Nursery Ltd.'s balance sheet reported the following shareholders' equity: Shareholders' Equity Contributed
Question:
At January 1, 2015, Bohemia Nursery Ltd.'s balance sheet reported the following shareholders' equity:
Shareholders' Equity
Contributed capital:
Preferred shares, $0.75, cumulative (3 years in arrears),
liquidation price of $25, 100,000 shares authorized,
40,000 shares issued and outstanding ....................................... $ 800,000
Common shares:
Class A, 15,000 shares authorized, issued, and outstanding ............ 120,000
Class B, unlimited number of shares authorized,
75,000 shares issued and outstanding .................................... 375,000
Total contributed capital ..................................................... 1,295,000
Retained earnings ............................................................. 300,000
Total shareholders' equity ....................................................$1,595,000
The company had the following transactions on the dates indicated:
2015
Dec. 1 The Company declared dividends of $170,000, payable on January 14, 2016, to the shareholders of record on December 31, 2015. Indicate the amount that would be payable to the preferred shareholders and to the common shareholders. Class A and Class B shares receive the same per-share dividend.
31 The company reported net income after taxes of $80,000 and closed the Income Summary account.
Jan. 7 The Company sold 10,000 preferred shares at $22.50 per share.
14 The company paid the dividend declared on December 1, 2015.
Feb. 14 The Company sold 15,000 Class B common shares at $5.00 per share.
Dec. 2 The Company declared dividends of $75,000, payable on January 13, 2017, to the shareholders of record on December 31, 2016. Indicate the amount that would be payable to the preferred shareholders and to the common shareholders.
31 The company reported net income after taxes of $63,000 and closed the Income Summary account.
2017
Jan. 13 Paid the dividend declared on December 2, 2016.
Required
1. Record the transactions in the general journal.
2. Prepare the shareholders' equity section of the balance sheet as of the close of business on December 31, 2016.
3. Calculate the book value per share of the preferred shares and of the common shares on
December 31, 2016.
4. What was the average price at which the Class A common shares were issued?
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
Req 1 General Journal DATE 2015 ACCOUNT TITLES AND EXPLANATION POST REF DEBIT CREDIT Dec 1 Retained Earnings 170000 Dividends Payable x Preferred Shar...View the full answer
Horngrens Accounting
ISBN: 978-0133855388
10th Canadian edition Volume 2
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann L. Johnston, Peter R. Norwood
