QUESTION SEVEN (14 MARKS) Part A (4 Marks) Clive Ltd declares a $180,000 dividend on 30th June 2019. It has 160,000 ordinary shares issued and 40,000 5 per cent cumulative preference shares. The issue price on the preference shares was $24.00 per share. The last dividend paid to any shareholders was on 30th June 2016. Required: Determine how the $180,000 30th June 2019 dividend will be allocated to preference and ordinary shareholders and prepare the General Journal entry to record the declaration made 30th June 2019. Assuming the preference shares were non-cumulative, determine how the 30th June 2019, dividend will be allocated between the preference and ordinary shareholders. (2 x 2 = 4 Marks) Part B (10 Marks) Samantha Ltd recorded the following balances in the Shareholders' Equity as at 1st January 2019: Contributed Equity (800,000 ordinary shares) $4,200,000 Retained Earnings $4,450,000 The following transactions relating to shareholders occurred during the year: Issued 400,000 ordinary shares for cash at $8.00 per share. 1st February 2019 1st July 2019 Declared a 1 for 10 share dividend payable 1st August 2019. The trading price of the shares on 1st July was $7.00 per share. Declared a 50 cent per share cash dividend for shareholders on record as at 1st October, payable on 15th October. 15th August 2019 1st November 2019 Bought back 12,000 ordinary shares for $90,000. 31st December 2019 The Income Statement recorded Revenue of $3,240,000 and Expenses of $2,200,000. Required: i) Prepare the General Journal entries to record the transactions. (5 Marks) Prepare the Shareholders' Equity section of the Balance Sheet as at 31st December 2019. (3 Marks) Calculate the earnings per share for the year. (2 Marks) QUESTION SEVEN (14 MARKS) Part A (4 Marks) Clive Ltd declares a $180,000 dividend on 30th June 2019. It has 160,000 ordinary shares issued and 40,000 5 per cent cumulative preference shares. The issue price on the preference shares was $24.00 per share. The last dividend paid to any shareholders was on 30th June 2016. Required: Determine how the $180,000 30th June 2019 dividend will be allocated to preference and ordinary shareholders and prepare the General Journal entry to record the declaration made 30th June 2019. Assuming the preference shares were non-cumulative, determine how the 30th June 2019, dividend will be allocated between the preference and ordinary shareholders. (2 x 2 = 4 Marks) Part B (10 Marks) Samantha Ltd recorded the following balances in the Shareholders' Equity as at 1st January 2019: Contributed Equity (800,000 ordinary shares) $4,200,000 Retained Earnings $4,450,000 The following transactions relating to shareholders occurred during the year: Issued 400,000 ordinary shares for cash at $8.00 per share. 1st February 2019 1st July 2019 Declared a 1 for 10 share dividend payable 1st August 2019. The trading price of the shares on 1st July was $7.00 per share. Declared a 50 cent per share cash dividend for shareholders on record as at 1st October, payable on 15th October. 15th August 2019 1st November 2019 Bought back 12,000 ordinary shares for $90,000. 31st December 2019 The Income Statement recorded Revenue of $3,240,000 and Expenses of $2,200,000. Required: i) Prepare the General Journal entries to record the transactions. (5 Marks) Prepare the Shareholders' Equity section of the Balance Sheet as at 31st December 2019. (3 Marks) Calculate the earnings per share for the year. (2 Marks)
