Nothing Special   »   [go: up one dir, main page]
Scribd Logo
Upload

Welcome to Scribd!

  • 1K views

    Problem 3: Carr Company Reported The Following Shareholders' Equity On January 1, 2021

    Uploaded by

    Katrina Dela Cruz
    The document provides financial information for Carr Company as of January 1, 2021 and transactions that occurred throughout the year, including the retirement of treasury shares, declaration of dividends on preference shares, distribution of shares from an investment as a dividend, and correction of an overstatement of prior period income. It requires preparing a statement of changes in equity for Carr Company for the period ended December 31, 2021 showing the effects of these transactions on ordinary shares, preference shares, share premium, retained earnings, and treasury shares.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Problem 3: Carr Company Reported The Following Shareholders' Equity On January 1, 2021

    Uploaded by

    Katrina Dela Cruz
    1K views2 pages
    The document provides financial information for Carr Company as of January 1, 2021 and transactions that occurred throughout the year, including the retirement of treasury shares, declaration of dividends on preference shares, distribution of shares from an investment as a dividend, and correction of an overstatement of prior period income. It requires preparing a statement of changes in equity for Carr Company for the period ended December 31, 2021 showing the effects of these transactions on ordinary shares, preference shares, share premium, retained earnings, and treasury shares.

    Original Description:

    Original Title

    Problem 3

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document provides financial information for Carr Company as of January 1, 2021 and transactions that occurred throughout the year, including the retirement of treasury shares, declaration of dividends on preference shares, distribution of shares from an investment as a dividend, and correction of an overstatement of prior period income. It requires preparing a statement of changes in equity for Carr Company for the period ended December 31, 2021 showing the effects of these transactions on ordinary shares, preference shares, share premium, retained earnings, and treasury shares.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views2 pages

    Problem 3: Carr Company Reported The Following Shareholders' Equity On January 1, 2021

    Uploaded by

    Katrina Dela Cruz
    The document provides financial information for Carr Company as of January 1, 2021 and transactions that occurred throughout the year, including the retirement of treasury shares, declaration of dividends on preference shares, distribution of shares from an investment as a dividend, and correction of an overstatement of prior period income. It requires preparing a statement of changes in equity for Carr Company for the period ended December 31, 2021 showing the effects of these transactions on ordinary shares, preference shares, share premium, retained earnings, and treasury shares.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Problem 3: Carr Company reported the following shareholders’ equity on January 1, 2021:

    Preference share capital 1,800,000


    Share premium – preference 90,000
    Ordinary share capital 5,150,000
    Share premium – ordinary 3,500,000
    Retained earnings 4,000,000
    Treasury shares – ordinary 270,000
    On January 1, 2021, Carr Company had 100,000 authorized shares of P100 par, 10% cumulative
    preference share capital
    and 3,000,000 authorized shares of no-par ordinary share capital with a stated value of P5 per share.
    On January 10, 2021, Carr formally retired all the 30,000 ordinary shares of treasury. The treasury shares
    had been
    acquired in the previous year and were originally issued at P10 per share.
    Carr owned 10,000 ordinary shares of Bush Company purchased several years ago for P600,000.
    On February 15, Carr declared and paid a dividend in kind of one share of Bush for every hundred
    ordinary shares of Carr
    held by a shareholder of record on February 28, 2021. The market price of Bush share was P75 on
    February 15, 2021.
    On December 12, 2021, Carr declared the yearly cash dividend on preference share, payable on January
    14, 2022, to
    shareholders of record on December 31, 2021.
    On January 15, 2022, before the accounting records were closed for 2021, Carr became aware that rent
    income for the
    year ended December 31, 2020 was overstated by P500,000.
    The after-tax effect on 2020 net income was P350,000. The appropriate correcting entry was recorded.
    After correcting rent income, net income for 2021 was P2,600,000.
    Required: Prepare a Statement of Changes in Equity for 2021. (Provide for money columns for the
    following: Ordinary
    Shares, Preference Shares, Share Premium, Retained Earnings, and Treasury Shares)
    Carr Company
    Statement of Changes in Equity
    For the Period Ended December 31, 2021

    OS PS SP RE TS
    Balances, Jan. 1 5,150,000.00 1,800,000.00 3,590,000.00 4,000,000.00 270,000.00
    Retirement of Treasury - 150,000.00 - 120,000.00 - 270,000.00
    Property Dividend - 750,000.00
    Dividend - Preference share - 180,000.00
    Overstatement of prior period income - 350,000.00
    Net Income 2,600,000.00
    Balance, Dec 31 5,000,000.00 1,800,000.00 3,470,000.00 5,320,000.00 -

    2021
    JAN. 10 Ordinary Shares 150,000.00
    Share Premium 120,000.00
    Treasury Shares 270,000.00

    FEB. 10 Retained earnings 750,000.00


    Dividend Payable 750,000.00

    DEC. 12 Retained Earnings 180,000.00


    Dividends Payable 180,000.00

    You might also like