The Shaolin Clothing Company was authorized to issue 500,000 shares of $2 par value ordinary shares...

    

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The Shaolin Clothing Company was authorized to issue 500,000 shares of $2 par value ordinary shares and 100,000 shares of $100 par value, 10 percent cumulative preference shares. The accounting records of the captions for the year 2016 were destroyed by the disaster. On January 1, 2016, Shaolin Clothing had the following shares issued and outstanding with one-year dividends-in-arrears for preference shares in 2015: S2 stated value, ordinary shares s100 par, 10%, cumulative, preference shares 300,000 shares 50,000 shares During the year 2016, the following activities occurred: Feb. 2 Issued for cash 50,000 ordinary shares at $22 per share via the local stock exchange. Feb. 20 Issued for cash 10,000 preference shares at $184 per share. Jun. 6 Acquired 10,000 of its ordinary shares at $23 per share. Jul. 15 Declared a cash dividend to both classes of shareholders record on July 25 and payable on Aug. 1. The amount of dividend to the ordinary shares is $2.50 per share. The amount of dividends to preference shares is $10 per share. Jul. 25 Record date for the cash dividend declared on July 15. Aug. 1 Paid the cash dividend declared on July 15. Sept. 5 Declared a 10% share dividend to the ordinary shares of record on Sept. 25. The market value of ordinary shares on Sept. 5 was $24 per share. Sept. 25 Record date for the 10% share dividend declared on Sept. 5. Oct. 6 Sold 8,000 treasury shares acquired on June 6 at $28 per share. Oct. 12 Issued the 10% share dividend declared on Sept. 5. Nov. 4 Sold the remaining 2,000 treasury shares acquired on June 6 at $22 per share Acquired an used warehouse in exchange for 8,000 preference shares. In view of the appraised value of the warehouse and the progress of the company, the directors agreed that the preference shares were to be values for purpose of this transaction at $185 per share. Nov. 18 Dec. 31 Accrual the revenue earned (in cash) for the year, $7,920,820. Inventory on Dec. 31, 2015. $500,750. Assume no new purchase during year 2016. Physical count of the inventory by the company's auditors and is considered correct, indicate inventory $170,130. Dec. 31 Dec. 31 Accrual the operating expenses consumed for the year, $5,526,348. Dec. 31 After the revenue and all costs against revenues were closed into the Income Summary account, determine the net profit and transfer to retained earnings. Closed both the cash and share dividend declared on Jul. 15 and Sept. 5, respectively, to retained earnings. Dec. 31 You are required to: a) Prepare journal entries in general journal form and use subsidy accounts to re-record the above activities. Include entries at December 31, 2016 to close the Income Summary account and the Dividends account. The Shaolin Clothing Company General Journal Jan. 1, 2016 - Dec. 31, 2016 Date Account Title & Explanation Debit Credit b) Shaolin has the following data in its statements as on Dec. 31, 2015: Cash $19,052,000 Share Capital - Preference Share Capital - Ordinary $5,000,000 Inventory 5,000,750 600,000 Share Premium - Preference 3,468,600 Share Premium - Ordinary Retained Earnings 5,123,730 9,860,420 $24,052,750 $24,052,750 Prepare the shareholders" equity section of the Shaolin Clothing statement of financial position at December 31, 2016. The Shaolin Clothing Company Statement of Financial Position (partial) December 31, 2016 Shareholders' Equity The Shaolin Clothing Company was authorized to issue 500,000 shares of $2 par value ordinary shares and 100,000 shares of $100 par value, 10 percent cumulative preference shares. The accounting records of the captions for the year 2016 were destroyed by the disaster. On January 1, 2016, Shaolin Clothing had the following shares issued and outstanding with one-year dividends-in-arrears for preference shares in 2015: S2 stated value, ordinary shares s100 par, 10%, cumulative, preference shares 300,000 shares 50,000 shares During the year 2016, the following activities occurred: Feb. 2 Issued for cash 50,000 ordinary shares at $22 per share via the local stock exchange. Feb. 20 Issued for cash 10,000 preference shares at $184 per share. Jun. 6 Acquired 10,000 of its ordinary shares at $23 per share. Jul. 15 Declared a cash dividend to both classes of shareholders record on July 25 and payable on Aug. 1. The amount of dividend to the ordinary shares is $2.50 per share. The amount of dividends to preference shares is $10 per share. Jul. 25 Record date for the cash dividend declared on July 15. Aug. 1 Paid the cash dividend declared on July 15. Sept. 5 Declared a 10% share dividend to the ordinary shares of record on Sept. 25. The market value of ordinary shares on Sept. 5 was $24 per share. Sept. 25 Record date for the 10% share dividend declared on Sept. 5. Oct. 6 Sold 8,000 treasury shares acquired on June 6 at $28 per share. Oct. 12 Issued the 10% share dividend declared on Sept. 5. Nov. 4 Sold the remaining 2,000 treasury shares acquired on June 6 at $22 per share Acquired an used warehouse in exchange for 8,000 preference shares. In view of the appraised value of the warehouse and the progress of the company, the directors agreed that the preference shares were to be values for purpose of this transaction at $185 per share. Nov. 18 Dec. 31 Accrual the revenue earned (in cash) for the year, $7,920,820. Inventory on Dec. 31, 2015. $500,750. Assume no new purchase during year 2016. Physical count of the inventory by the company's auditors and is considered correct, indicate inventory $170,130. Dec. 31 Dec. 31 Accrual the operating expenses consumed for the year, $5,526,348. Dec. 31 After the revenue and all costs against revenues were closed into the Income Summary account, determine the net profit and transfer to retained earnings. Closed both the cash and share dividend declared on Jul. 15 and Sept. 5, respectively, to retained earnings. Dec. 31 You are required to: a) Prepare journal entries in general journal form and use subsidy accounts to re-record the above activities. Include entries at December 31, 2016 to close the Income Summary account and the Dividends account. The Shaolin Clothing Company General Journal Jan. 1, 2016 - Dec. 31, 2016 Date Account Title & Explanation Debit Credit b) Shaolin has the following data in its statements as on Dec. 31, 2015: Cash $19,052,000 Share Capital - Preference Share Capital - Ordinary $5,000,000 Inventory 5,000,750 600,000 Share Premium - Preference 3,468,600 Share Premium - Ordinary Retained Earnings 5,123,730 9,860,420 $24,052,750 $24,052,750 Prepare the shareholders" equity section of the Shaolin Clothing statement of financial position at December 31, 2016. The Shaolin Clothing Company Statement of Financial Position (partial) December 31, 2016 Shareholders' Equity

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a Journal Entries Date Particulars Feb 2 Cash AC 50000 22 Dr Feb 20 ... View the full answer