Radford Corporation's charter authorized 1 million shares of $11 par value common shares, and 300,000 shares of

Question:

Radford Corporation's charter authorized 1 million shares of $11 par value common shares, and 300,000 shares of 6% cumulative and non-participating preferred shares, with a par value of $100 per share. The corporation made the following share transactions through December 31, 2014: 300,000 common shares were issued for $3.6 million and 10,000 preferred shares were issued for machinery valued at $1,475,000. Subscriptions for 10,500 common shares have been taken, and 30% of the subscription price of $16 per share has been collected. The shares will be issued upon collection of the subscription price in full. In addition, 10,000 common shares have been purchased for $15 and retired. The Retained Earnings balance is $180,000 before considering the transactions above.

Instructions

(a) Prepare the shareholders' equity section of the statement of financial position in good form.

(b) Repeat part (a) assuming the common shares and preferred shares are no par.

(c) Discuss the alternative presentations of the share subscriptions receivable account. Would the presentation of the receivable affect the book value or the rate of return on shareholders' equity?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...