Question

Problem 15-8 Concord Mills Ltd. had the following shareholders' equity at January 1, 2020. Preferred shares, 8%, $100 par value, 10,000 shares authorized, 3,400 shares issued Common shares, $2 par value, 200,000 shares authorized, 70,000 shares issued Common shares subscribed, 9,400 shares Contributed surplus-preferred Contributed surplus-common Retained earnings $340,000 140,000 18,800 17,000 934,000 769,000 2,218,800 34,000 $2,184,800 Less: Common share subscriptions receivable Total shareholders' equity The contributed surplus accounts arose from amounts received in excess of the par value of the shares when issued. During 2020, the following transactions occurred: 1. 2. 4. 5. Equipment was purchased in exchange for 100 common shares. The shares' fair value on the exchange date was $12 per share. Sold 840 common shares and 90 preferred shares for the lump-sum price of $21,000. The common shares had a market price of $14 at the time of the sale. Sold 1,400 preferred shares for cash at $102 per share. All of the subscribers paid their subscription prices into the firm. The common shares subscribed were issued. Repurchased and retired 840 common shares at $17 per share. Calculate the amount recorded to contributed surplus on a pro-rata basis and round to three decimal places. Net income for 2020 was $234,000. 7. Prepare the shareholders' equity section for the company as at December 31, 2020. (Round average price per share to 3 decimal places, e.g. 5.275 and the final answers to 0 decimal places, e.g. 5,275.)

Answer 1

Please note that I had put Common shares & preffered shares final amount by adding below adjustment entries.

Date Page Share capital Particular Amount common shares 39/ 20 Preffered shares 176200 Total share capital 210320 contributed Shared capital reffered 17000 b) common 934000 Total paid-in capital 1161320 Retain earnings 1003000 Kotas shareholders comity 2160320 Surplus A t