Question 2 As at 31 December 20X0, the shareholders' equity of Modern Pte Ltd comprised 4,400,000...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question 2 As at 31 December 20X0, the shareholders' equity of Modern Pte Ltd comprised 4,400,000 issued and outstanding ordinary shares at book value of $3,080,000, and retained earnings of $910,000. The company's financial year end is 31 December. During 20X1, the following events took place: (i) On 1 April 20X1, for the first time since the company started, Modern Pte Ltd bought back 120,000 of its own shares for cash at the market price of $0.80 per share. (ii) On 1 May 20X1, at the annual general meeting, the company's shareholders approved and the company declared cash dividend at $0.07 per share. (iii) The cash dividend declared in (ii) was distributed in cash to shareholders on 15 June 20X1. (iv) On 1 November 20X1, Modern Pte Ltd reissued 50,000 of its treasury shares at the market price of $0.85 per share. (v) Modern Pte Ltd owned shares in Covi Ltd, which was measured as a fair value through profit or loss investment under FRS 109 Financial Instruments. The carrying amount of this investment was $70,000 and the fair value was $72,000 on 31 December 20X1. Question 2a Show the accounting effects of Events (i) to (v) by preparing the necessary journal entries that Modern Pte Ltd should record. Include dates but exclude journal narratives. Please state assumptions made, if any. Please show all workings clearly to get full credit. Question 2b Present the Statement of Changes in Equity for Modern Pte Ltd for the year ended 31 December 20X1. Clearly show the movements in the share capital, retained earnings, treasury shares and any other relevant categories in the statement. Assume that the net profit and other comprehensive income for the year ended 31 December 20X1 are $989,000 and $0 respectively, before accounting for Events (i) to (v). Question 2 As at 31 December 20X0, the shareholders' equity of Modern Pte Ltd comprised 4,400,000 issued and outstanding ordinary shares at book value of $3,080,000, and retained earnings of $910,000. The company's financial year end is 31 December. During 20X1, the following events took place: (i) On 1 April 20X1, for the first time since the company started, Modern Pte Ltd bought back 120,000 of its own shares for cash at the market price of $0.80 per share. (ii) On 1 May 20X1, at the annual general meeting, the company's shareholders approved and the company declared cash dividend at $0.07 per share. (iii) The cash dividend declared in (ii) was distributed in cash to shareholders on 15 June 20X1. (iv) On 1 November 20X1, Modern Pte Ltd reissued 50,000 of its treasury shares at the market price of $0.85 per share. (v) Modern Pte Ltd owned shares in Covi Ltd, which was measured as a fair value through profit or loss investment under FRS 109 Financial Instruments. The carrying amount of this investment was $70,000 and the fair value was $72,000 on 31 December 20X1. Question 2a Show the accounting effects of Events (i) to (v) by preparing the necessary journal entries that Modern Pte Ltd should record. Include dates but exclude journal narratives. Please state assumptions made, if any. Please show all workings clearly to get full credit. Question 2b Present the Statement of Changes in Equity for Modern Pte Ltd for the year ended 31 December 20X1. Clearly show the movements in the share capital, retained earnings, treasury shares and any other relevant categories in the statement. Assume that the net profit and other comprehensive income for the year ended 31 December 20X1 are $989,000 and $0 respectively, before accounting for Events (i) to (v).
Expert Answer:
Answer rating: 100% (QA)
To calculate the shareholders equity of Modern Pte Ltd as at 31 December 20X1 we need to account for ... View the full answer
Related Book For
International Financial Reporting A Practical Guide
ISBN: 978-1292200743
6th edition
Authors: Alan Melville
Posted Date:
Students also viewed these finance questions
-
What are the common myths about C4 plants?
-
The summarized statements for the year ended 31 December 2007 for Mat, Rug and P entities are as follows: Statements of comprehensive income for the year ended 31 December 2007 The following...
-
Certain companies regard the management of cultural diversity as a way of developing new competencies that give them certain advantages. They are, for example, able to recruit and hold on to good...
-
The table below lists the number of pounds of American cheese consumed per capita for selected years. a) Find a linear sequence function an = an + b that models the data. Let n represent the number...
-
Carrie and Zachary, loan officers at OWell Fargo Bank, compare the interest rates for 48-month fixed-rate auto loans and 48-month variable-rate auto loans. They select two independent random samples...
-
There is a useful approximation to the certainty equivalent that is easy to derive. A second-order expansion near $\bar{x}=\mathrm{E}(x)$ gives \[U(x) \approx...
-
Alpha Products, Inc., is having a problem trying to control inventory. There is insufi cient time to devote to all its items equally. Here is a sample of some items stocked, along with the annual...
-
The following formula for k(t), describes the rate of change as the function of time (t):k(f) = 4e-1. What is the average rate of change between t 2 seconds and t = 5 seconds?
-
Given that f(x) = 8x + 5 and g(x) = 1, calculate (a) f(g(2)) (d) g(f(10)) = =
-
Chrome File Edit View History Bookmarks Profiles Tab Window Help MT217 Finance O PG Campus =Quiz: Unit 6 Lab Quiz X PG Campus G Sir W. Arthur Lewi... *FREE Digital Down... Christopher William X $ Do...
-
Identify the following rules as either representative of the common law of contracts or UCC rule on formation of sales and lease contracts. Your answer should be either "Common Law" or "UCC." 1 . If...
-
A chipmunk scampers about collecting safflower seeds that birds dropped from a feeder hanging overhead. Initially, the little creature is at position vector r1x = 3.07 m and ry = -1.71 m. After...
-
A share is expected to pay a dividend of Shs 30/= in one years time. Thereafter, dividend growth is expected to be 5% per annum for two years and 2% per annum subsequently. If the market...
-
Goulet Inc., set up as a privately held corporation, operating as a ready to wear garments retailer, of which 100% of the Common Shares are owned by Lawrence Goulet. You were hired to account for...
-
Briefly identify and explain each of the following Polis Aegean Sea Achilles Hector Trojan Horse Athena Sparta Agamemnon Priam Helen of Troy Zeus.
-
Name some of the various types of financial intermediaries described in the chapter and indicate the primary reason(s) each was created.
-
For the DTS study, use subjects with all five assessments in HamD scores in the CAU group for this question. The intraclass correlation coefficient among the repeated measures in Ham-D scores can be...
-
Generalize the model considered in Example 4.11 to a marginal model for the longitudinal DOS data and compare the findings with that in Example4.11 Example 4.11 For the models in Example 4.8 DOS,...
-
Prove (9.31) . = BE (GS;S; G) BT, B = (B), B-T (9.31)
Study smarter with the SolutionInn App