CHAPTER 22

Problem 22-1
December 31, 2020
Retained earnings 1,350,000
Dividends payable 1,350,000

January 15, 2021

No entry

January 31, 2021

Dividends payable 1,350,000
Cash 1,350,000

Problem 22-2
2020
Oct. 31 Retained earnings 1,300,000
Dividend payable (10,000 x 130) 1,300,000

Dec. 31 Retained earnings 200,000

Dividend payable (10,000 x 20) 200,000

2021
March 31 Dividend payable 400,000
Retained earnings (10,000 x 40) 400,000

31 Dividend payable 1,100,000

Investment in equity securities 900,000
Gain on distribution of property dividend 200,000

Problem 22-3
2020
March 1 Treasury shares 500,000
Cash (50,000 x 10) 500,000

July 1 Retained earnings 1,500,000

Dividend payable 1,500,000

Dec. 31 Retained earnings 300,000

Dividend payable 300,000

31 Retained earnings 500,000

Retained earnings appropriated for treasury shares 500,000
 31 Income summary 3,000,000
Retained earnings 3,000,000

2021
March 1 Retained earnings 200,000
Dividend payable 200,000

Dividend payable 2,000,000

Inventory 1,200,000
Gain on distribution of property dividend 800,000

Problem 22-4
2020
Oct. 1 Retained earnings 3,800,000
Dividend payable 3,800,000

Dec. 31 Dividend payable 100,000

Retained earnings 100,000

31 Impairment loss 300,000

Machinery 300,000

2021
April 1 Dividend payable 200,000
Retained earnings 200,000

1 Dividend payable 3,500,000

Loss on distribution of property dividend 200,000
Impairment loss 3,700,000

Problem 22-5
1. Retained earnings 1,200,000
Capital liquidated 300,000
Dividends payable (50,000 x 30) 1,500,000

2. Dividends payable 1,500,000

Cash 1,500,000
Problem 22-6
1. 2020
Dec. 31 Retained earnings 5,200,000
Dividend payable 5,200,000

2021
July 1 Dividend payable 5,200,000
Cash 5,000,000
Retained earnings 200,000

2. 2020
Dec. 31 Retained earnings 5,200,000
Dividend payable 5,200,000

2021
July 1 Retained earnings 800,000
Dividend payable 800,000

1 Dividend payable 6,000,000

Car inventory 4,000,000
Gain on distribution of property dividend 2,000,000

Problem 22-7
1. Retained earnings 1,000,000
Share dividends payable 1,000,000

Share dividends payable 1,000,000

Share capital 1,000,000

2. Retained earnings 750,000

Share dividends payable 500,000
Share premium 250,000

Share dividends payable 500,000

Share capital 500,000

Problem 22-8
1. Retained earnings 490,000
Share dividends payable 350,000
Share premium 140,000
Share dividends payable 350,000
Share capital unissued 350,000

2. Retained earnings 420,000

Share dividends payable 420,000

Share dividends payable 420,000

Treasury shares 420,000

Problem 22-9
a. Retained earnings 150,000
Share dividends payable 100,000
Share premium 50,000

Share dividends payable 100,000

Share capital 100,000

b. Retained earnings 500,000

Share dividends payable 500,000

Share dividends payable 500,000

Share capital 500,000

c. Retained earnings 225,000

Share dividends payable 150,000
Share premium 75,000

Share dividends payable 150,000

Share capital 150,000

d. Retained earnings 200,000

Share dividends payable 200,000

Share dividends payable 200,000

Share capital 170,000
Fractional warrants outstanding 30,000

Fractional warrants outstanding 30,000

Share capital 27,000
Share premium 3,000
Problem 22-10
2020
Sept. 15 Retained earnings 200,00
0
Share dividends payable 200,000

Oct. 15 Share dividends payable 200,00

0
Share capital 180,000
Fractional warrants outstanding 20,000

Dec. 1 Fractional warrants outstanding 20,000

Share capital 15,000
Share premium 5,000

2021
Sept. 15 Retained earnings 239,00
0
Scrip dividends payable 239,000

Nov. 15 Scrip dividends payable 239,00

0
Interest expense 4,780
Cash 243,780

Dec. 1 Retained earnings 478,00

0
Dividends payable 478,000

31 Retained earnings 239,00

0
Dividends payable 239,000

31 Dividends payable 717,00

0
Investment in Sharp Company 358,500
Gain on distribution of property dividend 358,500

Problem 22-11 Answer D

Problem 22-12 Answer D. 260,000

Problem 22-13
Question 1 Answer B. 4,550,000
 Question 2 Answer A. 300,000
Question 3 Answer B. 450,000

Problem 22-14 Answer C. 5,000,000

Problem 22-15 Answer A. 210,000

Problem 22-16 Answer A. 1,100,000

Problem 22-17 Answer C. 1,275,000

Problem 22-18 Answer A. 10%

Problem 22-19 Answer A. 6,100,000

Problem 22-20 Answer A. 5,250,000

Problem 22-21 Answer C. 3,820,000

Problem 22-22 Answer B. 400,000 decrease

Problem 22-23 Answer A. 5,600,000

Problem 22-24 Answer A. 3,600,000

Problem 22-25 Answer A. 3,450,000

Problem 22-26 Answer C. 200,000

Problem 22-27 Answer A. 364,000

Problem 22-28 Answer A. 560,000

Problem 22-29 Answer D. 0

Problem 22-30
Question 1 Answer B. 438,000
Question 2 Answer B. 4,380,000
Question 3 Answer B. 1,710,000
Question 4 Answer A. 8,140,000

Problem 22-31 Problem 22-32 Problem 22-33 Problem 22-34

1. A 1. A 1. C 1. B
2. A 2. A 2. A 2. C
3. D 3. A 3. A 3. B
4. C 4. B 4. A 4. B
5. A 5. B 5. D 5. D
6. B 6. C
7. B 7. B
8. C 8. C
9. A 9. D
10. A 10. A