Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Frank Ltd. is a public corporation, and has a December 31 fiscal year-end. There are currently 400,000 issued and outstanding no par value common shares

Frank Ltd. is a public corporation, and has a December 31 fiscal year-end. There are currently 400,000 issued and outstanding no par value common shares of Frank Ltd. reflected in the share capital account, at a total value of $8,000,000.

On January 10, 2018 a further 200,000 common shares were offered on a subscription basis at $23 per share. These shares were fully subscribed, and subsequently issued on receipt of the total proceeds on March 31, 2018.

On May 15, 2018 Frank Ltd. purchased for retirement 100,000 common shares at $22 per share.

On June 30, 2018, all common shareholders were issued one stock option for each common share presently held as part of a financial reorganization. Frank Ltd. received consideration of $290,000 for the 500,000 options issued. Each option entitled the holder to subsequently acquire one common share of Frank Ltd. for $25.

On August 15, 2018 Frank Ltd. shares were trading on the stock exchange at $28 and 70% of the outstanding options were exercised. At October 15, 2018 Frank Ltd. shares were trading at $22 and the remaining options lapsed.

On November 1, 2018 Frank Ltd. decided to double the number of common shares currently outstanding, and issued a two - for - one stock split.

On December 30, 2018 Frank Ltd. declared a dividend sufficient to pay $2 per share to all common shareholders.

REQUIRED:

Prepare Frank Ltd.'s 2018 entries to record the above transactions.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Financial Accounting

Authors: Fred Phillips, Shana Clor Proell, Robert Libby, Patricia Libby

7th Edition

1265440166, 978-1265440169

More Books

Students also viewed these Accounting questions

Question

6. How can hidden knowledge guide our actions?

Answered: 1 week ago

Question

7. How can the models we use have a detrimental effect on others?

Answered: 1 week ago