Question
Some of the account balances of Vos Limited at December 31, 2019 are as follows: $6 Preferred shares (2,000 shares authorized, 2,000 shares issued and
Some of the account balances of Vos Limited at December 31, 2019 are as follows:
$6 Preferred shares (2,000 shares authorized, 2,000 shares issued and outstanding) | $660,000 | |
Common shares (unlimited authorized, 62,000 shares issued and outstanding) | 500,000 | |
Contributed surplus | 103,000 | |
Retained earnings | 774,000 | |
Accumulated other comprehensive income | 22,320 |
The price of the companys common shares has been increasing steadily on the market; it was $21 on January 1, 2020 and advanced to $24 by July 1 and to $27 at the end of 2020. The preferred shares are not openly traded but were appraised at $120 per share during 2020. Vos follows IFRS and had net income of $145,000 during 2020. For the purpose of this question, ignore any dividend entitlement to the preferred shareholders.
The company declared a property dividend on April 1. Each common shareholder was to receive one share of Waterloo Corp. for every 10 shares outstanding. Vos had 8,000 shares of Waterloo (2% of the outstanding shares), and had purchased them in 2015 for $68,400. The shares are accounted for using the FV-OCI model. The accumulated other comprehensive income relates only to these shares. The fair value of the Waterloo shares was $16 per share on April 1. The property dividend was distributed on April 21 when the fair value of the Waterloo shares was $18.50. The Waterloo shares remained at a fair value of $18.50 until year end. -Prepare the journal entries
-On July 1, the company declared a 5% stock dividend at the fair value of the shares to the remaining common shareholders. The stock dividend was distributed July 22. Prepare the journal entries.
-A shareholder, in an effort to persuade Vos to expand into her city, donated to the company a plot of land with an appraised value of $42,000. Prepare the journal entry.
-Prepare the shareholders equity section of Voss SFP at December 31, 2020.
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