Question 22 (13 marks) (24 minutes)

The Iris Corporation had the following Shareholders Equity section as at December 31, 20x4:

Preferred Shares, $7, noncumulative, 100,000 shares outstanding

Common shares, 5,000,000 shares issued and outstanding Retained earnings

The following transactions took place in 20x5.

$10,000,000 24,000,000 8,000,000 $42,000,000

4

1. (1) Issued 1,000,000 common shares for total cash consideration of $6,000,000.

2. (2) Issued 500,000 common shares for total cash consideration of $3,400,000.

3. (3) Repurchased and cancelled 100,000 common shares at $12 per share.

4. (4) Issued 50,000 common shares for a land and building. An independent appraisal of the

   land and building indicated that the market value was $100,000 for the land and $350,000

   for the building.

5. (5) Split the common stock 2:1.

6. (6) Declared the dividends on preferred shares.

7. (7) Declared a $0.50 dividend on common shares.