When shares are issued fully payable on application, the journal entries to record the issue and allotment (assuming the minimum subscription is reached) are: Select one: a. Dr Cash Trust Cr Application Dr Cash Cr Cash trust b. Dr Cash Cr Application Dr Application Cr Share Capital c. Dr Cash Trust Cr Application Dr Application Cr Share capital Dr Cash Cr Cash Trust d. Dr Cash Cr Allotment Dr Allotment Cr Share capital

When shares are issued fully payable on application, the journal entries to record the issue and allotment (assuming the minimum subscription is reached) are: Select one: a. Dr Cash Trust Cr Application Dr Cash Cr Cash trust b. Dr Cash Cr Application Dr Application Cr Share Capital c. Dr Cash Trust Cr Application Dr Application Cr Share capital Dr Cash Cr Cash Trust d. Dr Cash Cr Allotment Dr Allotment Cr Share capital

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter11: Stockholders' Equity

Section: Chapter Questions

Problem 11.1KTQ

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When shares are subscribed, which of the following statements is/are correct? O A. A Shareholders' Equity account called Subscription Receivable is used to record the par-value of the shares issued. OB. The Share Capital account is credited when subscription contract is signed and a down payment is received. OC. The Share Premium account is credited when the subscription price is higher than the par value. O D. All of the above
Prepare Journal entries for the following cases. a) To record sale of shares on a subscription basis b) To record collection of down payment c) Collection of share subscriptions receivable d) To record issuance of shares e) To record forfeit of payment from defaulting subscribers
Holimont Ltd. (HL) has unlimited no-par common shares authorized. The following transactions took place in the first year: a. To record authorization of shares by board of directors (memorandum). b. Issued 200,000 shares at $20; collected cash in full and issued the shares. Share issue costs amounted to $67,000. Treat this amount as a reduction of the common share account. c. Received subscriptions for 100,000 shares at $30 per share; collected 70% of the subscription price. The shares will not be issued until collection of cash in full. d. Issued 400 shares to a lawyer in payment for legal fees related to trademark registration. The lawyer estimates that the legal services provided would have been worth $12,000. e. Issued 40,000 shares and assumed an $120,000 mortgage in total payment for a building with a fair value of $240,000. f. Collected balance on subscriptions receivable in (c).
Match each of the following terms with the correct definition: a. additional paid-in capitalb. issued and outstandingc. retained earningsd. treasury stocke. authorized share capitalf. par value Correct Definitions:A. The price at which each share is recorded in the company’s booksB. Held by investorsC. Cumulative amount of profits that have been plowed backD. The difference between the amount of cash raised by an equity issue and the par value of the issueE. The maximum number of shares that can be issued without shareholder approvalF. The amount that the company has spent buying back stock that it has not subsequently resold
From page 10-1 of the VLN, when a company sells shares of stock, those shares of stock are said to be: Group of answer choices A. Authorized shares B. Issued shares C. Outstanding shares D. Treasury shares
Record the issuance of shares when sold for cash and for noncash consideration
Match each of the following terms with the correct definition: a. additional paid-in capitalb. issued and outstandingc. retained earningsd. treasury stocke. authorized share capitalf. par value Correct Definitions:A. The price at which each share is recorded in the company’s booksB. Held by investorsC. Cumulative amount of profits that have been plowed backD. The difference between the amount of cash raised by an equity issue and the par value of the issueE. The maximum number of shares that can be issued without shareholder approvalF. The amount that the company has spent buying back stock that it has not subsequently resold SELECTED FORMULAS PVIFA = PVIF = requity = rassets + (rassets – rdebt) PV of tax shield = = Tc *DWACC = (1-Tc) * *() + *()
Cash dividends are paid based on the number of shares Select one: to. authorized b. issued c. outstanding d. not issued (unissued)
Cash dividends are paid on the basis of the number of shares? instructions: what is the correct answer a. authorized b. issued. c. outstanding d. outstanding less the number of treasury shares
The entry to record the reissuance of treasury shares above their original acquisition cost includes Select the correct response: a debit to share premium O a debit to retained earnings a credit to share premium a debit to both share premium and retained earnings
when shares are issued at a premium the value of the share premium should be : a- taken to the profit and loss account b- shown under current liabilities in the balance sheet c- shown under capital & reserves in the balance sheet d- taken to the trading account
Which of the following should be reported for share capital? Select one: a. The shares outstanding b. The shares authorized C. All of these choices are correct. d. The shares issued