Question 2 XYZ Berhad closes its accounts on 31 December annually. In January 2018, the company...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question 2 XYZ Berhad closes its accounts on 31 December annually. In January 2018, the company issued 25 million 4% redeemable preference shares at RM1 each. These shares were redeemed at the end of December 2021 at a premium of 18% by fully utilising the amount of retained earnings. The effective interest rate at 7.994877%. Payment of interest made at the end of 31 December each year. Carrying amount of 4% redeemable preference shares on 1 January 2019 of RM25,998,719 under amortised cost. Market price of the shares on 31 December each year from 2018 until 2020 as shown below On 31 December 2018 On 31 December 2019 On 31 December 2020 RM1.06 per share RM1.10 per share RM1.12 per share Required: 1. Briefly explain any TWO (2) methods of preference shares redemption. 2. Prepare the journal entries to record the above transactions (ignore narrations) for initial and subsequent measurements in 2019 and in 2020 under: a. Amortised cost. b. Fair value through profit or loss. 3. Prepare a 4% redeemable preference shares account for 2019 and 2020 under: a. Amortised cost. b. Fair value through profit or loss. 4. Illustrate statements of profit or loss (extracted) for the year ended on 31 December 2019 and 31 December 2020 only under amortised cost. 5. Illustrate statements of financial position (extracted) on 31 December 2019 and 31 December 2020 only under fair value through profit or loss. Question 2 XYZ Berhad closes its accounts on 31 December annually. In January 2018, the company issued 25 million 4% redeemable preference shares at RM1 each. These shares were redeemed at the end of December 2021 at a premium of 18% by fully utilising the amount of retained earnings. The effective interest rate at 7.994877%. Payment of interest made at the end of 31 December each year. Carrying amount of 4% redeemable preference shares on 1 January 2019 of RM25,998,719 under amortised cost. Market price of the shares on 31 December each year from 2018 until 2020 as shown below On 31 December 2018 On 31 December 2019 On 31 December 2020 RM1.06 per share RM1.10 per share RM1.12 per share Required: 1. Briefly explain any TWO (2) methods of preference shares redemption. 2. Prepare the journal entries to record the above transactions (ignore narrations) for initial and subsequent measurements in 2019 and in 2020 under: a. Amortised cost. b. Fair value through profit or loss. 3. Prepare a 4% redeemable preference shares account for 2019 and 2020 under: a. Amortised cost. b. Fair value through profit or loss. 4. Illustrate statements of profit or loss (extracted) for the year ended on 31 December 2019 and 31 December 2020 only under amortised cost. 5. Illustrate statements of financial position (extracted) on 31 December 2019 and 31 December 2020 only under fair value through profit or loss.
Expert Answer:
Answer rating: 100% (QA)
1 Briefly explain any TWO 2 methods of preference shares redemption There are two methods of prefere... View the full answer
Related Book For
Financial Accounting Tools for Business Decision Making
ISBN: 978-1119368458
7th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
Posted Date:
Students also viewed these accounting questions
-
Prepare the journal entries to record the following transactions on Derrick Companys books using a perpetual inventory system. (a) On March 2, Derrick Company sold $900,000 of merchandise to Rose...
-
Prepare the journal entries to record the following transactions on Monroe Companys books using a perpetual inventory system. (a) On March 2, Monroe Company sold $900,000 of merchandise to Churchill...
-
Prepare the journal entries to record the following transactions on Graff Companys books using a perpetual inventory system. (a) On March 2, Graff Company sold $800,000 of merchandise to Rodriguez...
-
What is the expected spot rate at the end of the year assuming PPP? initial spot rate 87.60 Expected US inflation 2.20% Expected Japanese yen inflation 0.00%
-
Primary Savings and Loan of Denver is conducting an ABM study of its teller operations. In this regard, the company has identified the following major activities performed by bank tellers: 1. Process...
-
The drive used in a bicycle is (a) belt drive (b) rope drive (c) gear drive (d) chain drive
-
What is a System Maintenance Concept? Identify examples of its UCs.
-
Amber Company produces electronic fish finders. It makes two different fish finders: the standard model, which is produced in bulk and sells for $200, and the deluxe model, which comes in various...
-
Develop a program to emulate an Address book. This program will have two classes, AddressBookEntry class, and AddressBook Class. The AddressBookEntry wil represent all the data associated with one...
-
Pat and Mandy are married and have a son, Steve, age 8. Mandy, age 29, earns $40,000 annually from her job. Pat, age 31, earns $50,000 annually from his job. Assume that Pat will die before Mandy....
-
Please use PESTEL to analyze the current business environment. In other words, what are some political/legal, economic, sociocultural, technological, and ecological trends now that are impactful for...
-
Roberts Industries uses a cost system for their baseball caps. Below is the information for the fabric used as direct materials inventory at a standard cost. The controller has established these...
-
North South East West Sales $100,000 $25,000 $75,000 $76,000 CGS $50,000 $5,000 $50,674 $45,000 other expenses $25,000 $3,000 $12,894 $15,000 Average total assets $5,000,000 $50,000 $300,500 $567,850...
-
Develop a ratio analysis for Walmart and Target of the year 2022, The ratios are: P/E ratio, Profit margin, Return on assets, Return on equity, Receivables turnover, Inventory turnover, Total assets...
-
Minor, Incorporated, had revenue of $625,000 and expenses (other than income taxes) of $286,000 for the current year. The company is subject to a 35 percent income tax rate. In addition, Minor had a...
-
Rose Hill, a soybean farm in northern Minnesota, has a herd of 33 dairy cows. The cows produce approximately 1,820 gallons of milk per week. The farm currently sells all its milk to a nearby...
-
The Thyristor shown in the following figure has a latching current of 50 mA and is fired by a pulse of duration 50 us. The firing pulse is applied after 0.1 s form connecting the switch. Show that...
-
The company manufactures three products: wooden chairs, tables and dressers. AFC started off as a 'Mom & Pop' shop but has grown rapidly. AFC uses one assembly line to build all three products,...
-
You are about to form a corporation that will need $500,000 to start operations. One option (the no-debt option) for the corporation is to raise the $500,000 by selling 50,000 common shares to you....
-
The following items are from the assets section of WestJet Airlines Ltd.'s December 31, 2015, statement of financial position (in thousands): Accounts...
-
One of the company's senior managers is questioning the need for the company to implement reviews of controls by the internal auditors if the company also segregates duties. What do you think about...
-
What are the key differences between financing entrepreneurial and established companies?
-
What is the purpose of staged financing?
-
What are the main types of investors that fund entrepreneurial ventures?
Study smarter with the SolutionInn App