rences between a stock dividend and a cash or property dividend? P15-12 Some of
ID: 2411866 • Letter: R
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rences between a stock dividend and a cash or property dividend? P15-12 Some of the account balances of Vos Limited at December 31, 2016 ar e as follows $6 Preferred shares (2,000 shares authorized, 2,000 shares issued and outstanding) Common shares (unlimited authorized, 50,000 shares issued and outstanding) Contributed surplus Retained earnings Accumulated other comprehensive income $520,000 500,000 103,000 774,000 22,350 The price of the companys common shares has ben increasing steadily on the market, it was $21 on January I it was $21 on January 1, 2017 and advanced to $24 by July 1 and to $27 at the end of 2017. Th appraised at S120 per share during 2017. Vos follows IFRS and had net income of S154,00 during 2017 e preferred shares are not openly traded but wereExplanation / Answer
Jornal entries
Date . Journal entry. Dr. Cr
April 1. Retained Earnings(8000*2) 16000
To dividend payable . 16000
April 1. Waterloo account. 68400
To cash . 68400
April21. Retained earnings account(2000*18.5) 37000
To dividend. 37000
July1. Retained earnings (500000*5%) 25000
To dividend payable. 25000
July 22 . Dividend payable account. 25000
To cash account. 25000
Dec 31. Land account. 42000
To revenue account. 42000
B)shareholders eqequity statement
Particulars. Amt . Amt
Opening bal . 500000
Retained earnings. 16000
Retained earnings 37000
Retained earnings . 25000
Land . 42000
Dividend payable 25000 645000
fFair value calcuculation
1.date of declaration
Retained earnings. (16*8000) 120000
Common stock dividend distrubutors. 12000
Conputation(8000*16=120000)
12000*10per share= 120000
b.at the time of distribution
common stock dividend distributors 120000
Common stock. 120000
(8000*18.5)=148000
Common stock dividend distributors . 148000
Common stock (shareholders) 148000
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