Problem 3

Q1 Common Preferred Total

Dividends in arrears $ - $ 42,000 42,000
Current dividends 56,000 14,000 70,000
Common shares (3%) 24,000 - 24,000
80,000 56,000 136,000
Allocated dividends 211,200 52,800 264,000
Total dividends $ 291,200 $ 108,800 $ 400,000

Q2 Common Preferred Total

Current dividends 56,000 14,000 70,000
Common shares (13%) 104,000 - 104,000
160,000 14,000 174,000
Allocated dividends 180,800 45,200 226,000
Total dividends $ 340,800 $ 59,200 $ 400,000
Problem 4
Total proceedings $ 150,000

Part a Market value - Preferred shares $ 70,000

Market value - Ordinary shares 90,000
$ 160,000
Allocation:
Common 84,375
Preferred 65,625
$ 150,000
Cash 100,000
Share capital - preferred shares 40,000
Share premium - preferred shares 25,625
Share capital - ordinary shares 30,000
Share premium - ordinary shares 54,375

Part b Market value - Preferred shares

Market value - Ordinary shares 120,000
$ 120,000
Allocation:
Common 120,000
Preferred 30,000
$ 150,000
Cash 100,000
Share premium - p/s (10,000)
Share capital - preferred shares 40,000
Share capital - ordinary shares 30,000
Share premium - ordinary shares 90,000
Problem 5
Q1 Common Preferred
Dividends in arrears $ - $ 144,000
Current Dividends 72,000 48,000
72,000 192,000
Allocated Dividends 321,600 214,400
Total Dividends $ 393,600 $ 406,400

Q2 Common Preferred
Current Dividends $ 72,000 $ 48,000
Common Shares (19%) 228,000
300,000 48,000
Allocated Dividends 271,200 180,800
Total Dividends $ 571,200 $ 228,800
 Total
$ 144,000
120,000
264,000
536,000
$ 800,000

Total
$ 120,000
228,000
348,000
452,000
$ 800,000
Problem 6
Total Proceedings
Q1
Market Value - Common
Market Value - Preferred

Allocation:
Common Shares
Preferred Shares

Cash 200,000
Share Capital- Common Shares
Share Premium- Common Shares
Share Capital- Preferred Shares
Share Premium- Preferred Shares

Q2
Market Value - Common
Market Value - Preferred

Allocation:
Common Shares
Preferred Shares

Cash 200,000
Share Capital - Common Shares
Share Premium - Common Shares
Share Capital - Preferred Shares
Share Premium -Preferred Shares
$ 200,000

102,000
50,000
$ 152,000

$ 134,211
65,789
$ 200,000

12,000
122,211
10,000
55,789

$ 114,000

$ 114,000

$ 114,000
86,000
$ 200,000

12,000
102,000
10,000
76,000
Problem 7

Q1 31-Dec-17
The gain on the land must be recognized as if the land was sold
Market value of land $ 4,800,000
Book value of land 3,500,000
Gain on land $ 1,300,000

Gain recognition Farmland 1,300,000

Gain on Farmland 1,300,000

Recognition of Retained earnings 4,800,000

Property Dividends Property Dividends Payable 4,800,000

31-Jan-18
Payments Property Dividends Payable 4,800,000
Farmland 4,800,000

Q2 31-Dec-17
The loss on the land must be recognized as if the land was sold
Market value of land $ 3,000,000
Book value of land 3,500,000
Loss on farmland $ (500,000)

Loss recognition Loss on farmland 500,000

Farmland 500,000

Recognition of Retained earnings 3,000,000

Property Dividends
Recognition of
Property Dividends Property Dividends Payable 3,000,000

31-Jan-18
Payments Property Dividends Payable 3,000,000
Farmland 3,000,000
and was sold

nd was sold