Question

The ! parti Problem 13-8A At January 1, 2015, Computer Metals Processing Ltd.'s balance sheet reported the foll At January 1, 2015, Computer Meta shareholders' equity: Ace Ret Recording the issuance of shares, allocating cash dividends calculating book value, preparing the liability and shareholders' equity sections of the balance sheet Со 2. Total shareholders' equity, $2,430,000 $ 200,00 Shareholders' Equity Contributed capital: Preferred shares, $1.25, cumulative (2 years in arrears), liquidation price of $20, 100,000 shares authorized, 30,000 shares issued and outstanding Common shares: Class A, 20,000 shares authorized and issued and outstanding Class B, unlimited number of shares authorized, 150,000 shares issued and outstanding Total contributed capital Retained earnings Total shareholders' equity 125,000 1,500 1.82501 770 Part 3 Accounting for Partnerships and Corporate Transactions

Answer 1

Answer to Part-1

The journal entries are shown below

DATE 2015 General Journal POST ACCOUNT TITLES AND EXPLANATIONS REF. DEBIT CREDIT Dec. 180.000 112.500 7.941 1 Retained Earnings Dividends Payable-Preferred Shares Dividends Payable-Common Shares Class A Dividends Payable-Common Shares Class B To record dividends declared on shares (30.000 x $1.25 x 3 years) 59.559 31 60.000 Income Summary Retained Earnings To close books and record net income for year. 60 000 2016 Jan. 235.000 235.000 7 | Cash Preferred Shares Sale of preferred shares for cash. (10.000 $23.50) 15 Dividends PayablePreferred Shares Dividends Payable--Common Shares. Class A Dividends Payable-Common Shares. Class B Cash Payment of dividends declared December 1 112.500 7.941 59.559 180.000 Feb. 14 65.000 165,000 14 | Cash Common Shares-Class B Sale of common shares for cash. (15,000 < $11)

Class A common shares = 20,000 (or 2/17 of total shares)

Class B common shared = 150,000 (or 15/17 of total shares)

Class A = 2/17* (180,000 - 112,500) = $7,941

Class B = 15/17 * (180,000-112,500) = $59,559

DATE General Journal POST. ACCOUNT TITLES AND EXPLANATIONS DEBIT CREDIT Dec. 2 120,000 50,000 7,568 Retained Earnings Dividends Payable-Preferred Dividends Payable-Common Shares, Class A Dividends Payable-Common Shares, Class B To record dividends declared on shares. (40,000 x $1.25) 62,432 145.000 31 Income Summary Retained Earnings To close books and record net income for year. 145.000 2017 Jan. 15 Dividends Payable-Preferred Dividends Payable-Common Shares, Class A Dividends Payable-Common Shares, Class B Cash Payment of dividends declared December 2. 50.000 7,568 62,432 120,000

Class A common shares = 20,000 (or 2/18.5 of total shares)

Class B common shared (150,000 + 15,000) = 165,000 (or 16.5/18.5 of total shares)

Class A = 2/18.5 * (120,000 - 50,000) = $7,568

Class B = 16.5/18.5 * (120,000-50,000) = $62,432

Answer to Part-2,3 and 4

Computer Metals Processing Ltd. Partial Balance Sheet December 31,2016 Stockholder's Equity Paid in Capital Capital stock Preferred Shares ($1.25 $20 par 40000 shares issued & Outstanding 400,000 Common Stock Class A 20,000 shares issued and Outstanding 125,000 Class B 165,000 shares issued and outstanding 1,650,000 Total capital stock Additional paid-in capital In excess of par value preferred stock 35,000 In excess of Par value-common stock Class B 15,000 Total additional paid-in capital Total Contributed capital Retained earnings (300000-180000+60000-120000+145000) Total stockholders' equity 2,175,000 50.000 2,225,000 205,000 2430000 Book Value Per Share - Preferred Shares 400,000 40,000 10 Per Share Book Value Per Share - Common Shares 1,775,000 185,000 9.59 Per Share Average Price 125,000 20,000 6.25 Per Share