1)Leslie Inc. owns 150,000 shares of Rogue Ltd. common shares, which are being accounting for by the equity method. On December 15, 2020, when Elves "Investment in Common Shares of Rogue Ltd." account has a carrying value of $ 7.50 per share, Elves declares all these shares to its shareholders as a property dividend, to be distributed on December 31, 2020. Elves had originally paid $ 12 for each share. Rogue has 1,500,000 shares issued and outstanding, for which the quoted market price was $ 10.50 per share on the declaration date and $ 13.50 per share on the distribution date. Ignoring income taxes, what would be the reduction in Elves' shareholders' equity as a result of the above transactions?

2)On December 31, 2020, Alfonso inc. had outstanding 2,000 no par value, $ 6, cumulative preferred shares and 30,000 no par value common shares. At this time, dividends in arrears on the preferred shares were $ 6,000. Cash dividends declared in 2021 totalled $ 30,000.

Preferred SharesCommon Shares

a) $ 6,000$ 24,000

b) $ 12,000$ 18,000

c) $ 24,000$ 6,000

d) $ 18,000$ 12,000

What were the amounts paid to each class of shares on December 31, 2020?

3)Royal reported net income of $ 5,300,000 for 2020, and earnings per share of $ 5.00. Included in the net income was $ 750,000 of bond interest expense related to its long-term debt. The income tax rate for 2020 was 30%. Dividends paid on preferred shares were $ 1,000,000. The payout ratio on common shares was 25%. What were the dividends paid on common shares in 2020?

4)If you were the shareholders of the company, what indication do you get from the company when treasury stocks are issued and not retired? Explain your answer in light of class discussion.

Answer rating: 100% (QA)

1 The correct answer is c 24000 6000 Explanation When Elves declares all its shares of Rogue ... View the full answer