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Finalchapter 21
Finalchapter 21
Problem 21-1
1. Journal Entries
a. Treasury shares 800,000
Cash 800,000
b. Cash 1,000,000
Treasury shares 800,000
Share premium 200,000
c. Cash 700,000
Retained earnings 100,000
Treasury shares 800,000
Problem 21-2
a. 1. Cash 4,000,00
0
Share capital (200,000 x 15) 3,000,000
Share premium 1,000,000
2. Cash 6,250,00
0
Share capital (250,000 x 15) 3,750,000
Share premium 2,500,000
4. Cash 1,250,00
0
Treasury shares 1,000,000
Share premium 250,000
b. 1. Cash 4,000,000
Share capital (200,000 x 20) 4,000,000
2. Cash 6,250,000
Share capital (250,000x 20) 5,000,000
Share premium 1,250,000
4. Cash 1,250,00
0
Treasury shares 1,000,000
Share premium 250,000
Problem 21-3
a. Cash 4,200,00
0
Preference share capital 3,000,000
Share premium- PS 1,200,000
b. Cash 5,500,00
0
Ordinary share capital 5,000,000
Share premium-ordinary share 500,000
Problem 21-4
a. Share capital 3,000,00
0
Share premium 200,000
Share capital (40,000 x 50) 2,000,000
Share premium - recapitalization 1,200,000
3. Memo
4. Cash 120,000
Treasury shares (3,000/ 10,000 x 300,000) 90,000
Share premium- treasury shares 30,000
Problem 21-6
a. Share capital 500,000
Donated capital (5,000,000 x 10) 500,000
Donated capital 500,000
Retained earnings 500,000
Problem 21-7
1. Cash (4,000 x 60) 240,000
Ordinary share capital (20,.000 rights/5-4,000 shares) 200,000
Share premium 40,000
2. Cash 2,500,00
0
Preference share capital 2,000,000
Share premium- PS 300,000
Share warrants outstanding 200,000
Problem 21-8
1. 2020
May 31 Cash 6,000,000
Bonds payable 5,000,000
Premium on bonds payable 250,000
Share warrants outstanding 750,000
. 2021
July 15 Memo-Issued 60,000 rights permitting shareholders
to acquire I share at PI30 for every 5 rights.
Problem 21-21
Question 1 Answer A. 2,250,000 (2,500,000 – 250,000)
Question 2 Answer B. 1,125,000 (1,250,000 – 125,000)
Question 3 Answer C. 775,000 (1,000,000 – 225,000)
Problem 21-22
Question 1 Answer C. 1,540,000
Question 2 Answer A. 2,250,000
Question 3 Answer A. 2,250,000
Problem 21-23
Question 1 Answer A. 1,500,000
Question 2 Answer A. 800,000
Question 3 Answer A. 2,800,000
Question 4 Answer A. 3,300,000
Problem 21-24
Problem 21-25