Professional Documents
Culture Documents
Requirement a
1 MEMO ENTRY
3 Cash 562,500
SubsCriptions receivable (15,00 x 50 x 75%) 562,500
4 Land 600,000
Share capital (10,000 x 50) 500,000
Share premium 100,000
Requirement b
Shareholders Equity:
Share capital, P50 par, 100,000 shares authorized, 32,000 shares
issued 1,600,000
Subseribed share capital 500,000
Subscriptions receivable (375,000)
Share premium 150,000
1,875,000
PROBLEM 20-2
Requirement a
3 Cash 750,000
Subscriptions receivable (10.000 x 100x 75%) 750,000
Requirement b
Sharcholders' cquity:
Authorized share capital, PI00 par, 50,000 shares 5,000,000
Unissucd share capital (2,000,000)
Issued share capital, 30,000 shares 3,000,000
Subscribed share capital 1,000,000
Subseriptions receivable (750,000)
Share premum 300,000
3,550,000
PROBLEM 20-3
Requirement a
1 Subscriptions receivable 4,000,000
Subscribed share capital (40,000 x 100) 4,000,000
3 Land 150,000
Building 850,000
Subscriptions receivable 1,000,000
4 Cash 375,000
Subscriptions receivable (15,000 x 100 x 256) 375,000
5 Legal expenses 50,000
Share capital 50,000
7 Cash 1,100,000
Subscriptions receivable 1,100,000
A 200,000
B 300,000
C (800,000x 75%) 600,000
Total 1,100,000
Requirement B
Shareholders' cquity:
Share capital, P100 par
Authorized-50,000 shares
Issued and outstanding-33,500 shares 3,350,000
Subscribed share capital 8,000 shares 800,000
Subscriptions receivable (605,000)
Share premium 20,000
3,565,000
PROBLEM 20-4
1 MEMO
2 Cash 2,400,000
Ordinary share capital 2,000,000
Share premium-ordinary share 400,000
3 Cash 1,200,000
Preference share capital 1,000,000
Share premium ordinary share 200,000
4 Subscriptions receivable 1,000,000
Subscribed preference share capital 1,000,000
5 Cash 400,000
Subscriptions receivable 400,000
9 Cash 300,000
Subscriptions receivable 300,000
10 Cash 600,000
Subscriptions receivable 600,000
Brook Company
Shareholders' equity
31-Dec-20
PROBLEM 20-5
3 Cash 625,000
Subscriptions receivable 625,000
4 Cash 750,000
Subscriptions receivable (10,.000 x 100x 75%) 750,000
6 Land 800,000
Building 2,500,000
Unissued ordinary share capital 3,000,000
Share premium 300,000
Shareholders' equity
Authorized ordinary share capital 10,000,000
Unissued ordinary share capital (5,000,000)
Issued ordinary share capital 5,000,000
Subscribed ordinary share capital 1,500,000
Subscriptions receivable (1,125,000)
Share premium 500,000
Retaincd earnings 3,000,000
8,875,000
PROBLEM 20-6
5 Land 230,000
Ordinary share capital (8,000 x 10) 80,000
Share premium ordinary 150,000
Preference Ordinary
PROBLEM 20-7
Requirement a
Building 7,000,000
Ordinary share capital (12,000 x 100) 1,200,000
Share premium-ordinary (12,000 x 200) 2,400,000
Preference share capital (20,000 x 100) 2,000,000
Share premium-preference 1,400,000
Requirement a
PROBLEM 20-8
PROBLEM 20-9
2020
JAN 1 Cash 5,000,000
Redeemable preference shares 5,000,000
2021
DEC 31 Interest expense 550,000
Accrued interest payable (10% x 5,500,000) 550,000
2022
JAN 1 Redeemable preference shares 5,000,000
Accrued interest payable 1,050,000
Cash 6,050,000
The normal billing rate is not necessarily the fair value of the services because this amount is likely to be
negotiable.
PROBLEM 20-17
QUESTION 1- C
QUESTION 2- C
Market value Fraction
Ordinary (10,000 x 360) 3,600,000 36 / 90
Preference (20,00 x 270) 5,400,000 54/90
9,000,000
QUESTION 3- C
QUESTION 4- C
PROBLEM 20-18
QUESTION 1- A
QUESTION 2- A
QUESTION 1- A
QUESTION 2- B
PROBLEM 20-21
1B
2C
3B
4B
5A
PROBLEM 20-22
1C
2C
3C
4A
5B
6D
7A
8D
9C
10 B
PROBLEM 20-23
1C
2C
3C
4D
5C
6D
7D
8D
9D
10 B
PROBLEM 20-24
1D
2A
3C
4B
5D
6B
7D
8D
9C
10 B
PROBLEM 20-25
1A
2D
3B
4B
5B
Allocated proceeds
3,200,000
4,800,000
8,000,000