On January 2,2016, the Board of Directors Kyle Mining Corporation declared a cash dividend of P800,000 to shareholders of record on January 18,2016 and payable on February 10,2016. Selected data from Kyle's December 31,2016 financial position are as follows: Accumulated Depreciation. Ordinary Share P 500,000 9,000,000 300,000 Share Premium Retained Earnings 600,000

On January 2,2016, the Board of Directors Kyle Mining Corporation declared a cash dividend of P800,000 to shareholders of record on January 18,2016 and payable on February 10,2016. Selected data from Kyle's December 31,2016 financial position are as follows: Accumulated Depreciation. Ordinary Share P 500,000 9,000,000 300,000 Share Premium Retained Earnings 600,000

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 18E

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On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.
Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1, 000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50, 000 to retire bonds with a face value (and book value) of 50, 000. e. On July 2, 2019, Farrell purchased equipment for 63, 000 cash. f. On December 31, 2019, land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows. (Appendix 21.1) Spreadsheet and Statement Refer to the information for Farrell Corporation in P21-13. Required: 1. Using the direct method for operating cash flows, prepare a spreadsheet to support a 2019 statement of cash flows. (Hint: Combine the income statement and December 31, 2019, balance sheet items for the adjusted trial balance. Use a retained earnings balance of 291,000 in this adjusted trial balance.) 2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)
Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1,000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50,000 to retire bonds with a face value (and book value) of 50,000. e. On July 2, 2019, Farrell purchased equipment for 63,000 cash. f. On December 31, 2019. land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows.
Miami Heat Inc. began operations in January2017, and reported the following results for each of its three years of operations. 2017 net loss-P 300,000;2018 net loss-P 30,000; 2019 Profit-P 3,950,000 At December 31, 2019, the company’s capital accounts were as follows:    5% Preference Shares, P 100 par, 100,000 shares authorized, 60,000shares issued and outstanding    Ordinary Shares, P10 par, 1,000,000 shares authorized, 800,000 shares issued and outstanding   Miami Heat Inc. has never paid a cash or share capital dividend and there has been no change in the capital accounts since its operations began. Assume the preference shares are cumulative and upon corporate liquidation, shares are preferred as to assets up to par. What is the book value per share of the preference shares on December 31, 2019?Required to answer. Single choice. a. P110 b. P105 c. P100 d. P115
Miami Heat Inc. began operations in January2017, and reported the following results for each of its three years of operations. 2017 net loss-P 300,000;2018 net loss-P 30,000; 2019 Profit-P 3,950,000 At December 31, 2019, the company’s capital accounts were as follows:    5% Preference Shares, P 100 par, 100,000 shares authorized, 60,000shares issued and outstanding    Ordinary Shares, P10 par, 1,000,000 shares authorized, 800,000 shares issued and outstanding   Miami Heat Inc. has never paid a cash or share capital dividend and there has been no change in the capital accounts since its operations began. Assume the preference shares are cumulative and upon corporate liquidation, shares are preferred as to assets up to par. What is the book value per share of the preference shares on December 31, 2019?
Miami Heat Inc. began operations in January2017, and reported the following results for each of its three years of operations. 2017 net loss-P 300,000;2018 net loss-P 30,000; 2019 Profit-P 3,950,000 At December 31, 2019, the company’s capital accounts were as follows:    5% Preference Shares, P 100 par, 100,000 shares authorized, 60,000shares issued and outstanding    Ordinary Shares, P10 par, 1,000,000 shares authorized, 800,000 shares issued and outstanding Miami Heat Inc. has never paid a cash or share capital dividend and there has been no change in the capital accounts since its operations began. Assume the preference shares are cumulative and upon corporate liquidation, shares are preferred as to assets up to par. What is the book value per share of the ordinary shares on December 31, 2019?Required to answer. Single choice. a. P13.78 b. P14.15 c. P14.52 d. P13.40
An entity began operations January 1, 2015 and reported the following net income or loss for five years of operations: 2015 1,500,000 loss 2016 1,300,000 loss 2017 1,200,000 loss 2018 4,500,000 income 2019 9,000,000 income On December 31, 2019, the capital accounts were: Preference share capital, P100 par, 12% participating and cumulative, 100,000 shares 10,000,000 Preference share capital P100 par, 10% nonparticipating, Noncumulative, 50,000 shares 5,000,000 Ordinary share capital, P10 par, 1,000,000 shares 10,000,000 The entity has never paid cash or share dividend. The capital accounts have not changed since the entity began operations. If the maximum amount available for cash dividends is declared on December 31, 2019, what amount of dividend is payable to 12% Preference Shareholders? 10% Preference Shareholders?
The following information was obtained from the financial records of Roger Ltd for the year ended 30 June 2020. Prepare the statement of profit or loss for the year ended 30 June 2020. Retained earnings 1 July 2019 $90 000 Sales revenue from continuing operations for the year $600 000 Finance costs $20 000 Estimated income tax expense for the year ended 30 June 2020 $112 500 Interim dividends paid (ordinary shares) $100 000 Write off research and development costs $5 000 Share capital (1 million $2 shares) $2 000 000 Expenses from ordinary activities (excluding finance costs) $200 000 Required: a) Prepare the statement of profit or loss for the year ended 30 June 2020. b) Prepare statement of changes in equity for the year ended 30 June 2020
Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2018. At January 1, 2018, the corporation had outstanding 102.5 million common shares, $1.0 par per share. Retained Earnings ($ in millions) 72 Beginning balance Retirement of 2.5 million commonshares for $19.5 million 2.20 66 Net income for the year Declaration and payment of a $0.21per share cash dividend 21.00 Declaration and distribution of a 3%stock dividend 14.00 100.80 Ending balance Required:1. Prepare the journal entries to record the transactions that affected Brenner-Jude's retained earnings during 2018 based on the information provided.2. Prepare a statement of retained earnings for Brenner-Jude for the year ended 2018.
Sunland Inc. began operations in January 2018 and reported the following results for each of its 3 years of operations. 2018 $252,000 net loss 2019 $39,000 net loss 2020 $868,000 net income At December 31, 2020, Sunland Inc. capital accounts were as follows. 8% cumulative preferred stock, par value $100; authorized, issued, and outstanding 4,900 shares $490,000 Common stock, par value $1.00; authorized 1,000,000 shares; issued and outstanding 769,000 shares $769,000 Sunland Inc. has never paid a cash or stock dividend. There has been no change in the capital accounts since Sunland began operations. The state law permits dividends only from retained earnings.(a) Compute the book value of the common stock at December 31, 2020. (Round answers to 2 decimal places, e.g. $38.50.) Book value per share $enter a dollar amount of the book value of the common stock at December 31, 2020 rounded to 2 decimal places (b) Compute the…
The income statement of Laguna Company for the years ended December 31, 2018 showed net income of P15,000,000. The net income reflects an income tax rate of 30%. the net income included a casually loss of P5,000,000 before income tax. no dividends on preference shares were declared or paid during the year. the entity reported the following shareholders' equity on December 31, 2018:preference share capital, 10% noncumulative, P50 par value, 100 000 shares P5 000 000ordinary share capital, P100 par value P30 000 000share premium P10 000 000retained earnings P18 000 000treasury ordinary shares, 50 000 at cost P4 000 000what amount should be reportedas basic earnings per share?a.58.00b.60.00c. 73.60d. 48.33
The Meg Company began operations in January 2013 and reported the following results for each of its three years of operations. 2014 – P520,000 loss; 2015 – P80,000 loss; 2016 – P1,600,000 profit At December 31, 2016, Meg Company’s capital accounts were as follows: 8% Cumulative Preference Share Capital, P100 par; 50,000 shares authorized, issued and outstanding P5,000,000 Ordinary Share Capital, P10 par; 1,000,000 shares authorized; 750,000 shares issued and outstanding 7,500,000 Meg Company has never paid a cash or bonus issue and there has been no change in its capital accounts since it began operations in 2014. The corporation law permits dividends only from retained earnings. a. What is the book value of the ordinary share at December 31, 2016?A. P 9.73B. P10.00C. P10.80D. P11.33 b. Use the same information given in number 53. What is the books value of the ordinary share at December 31, 2016 assuming that the preference share…