Required : 1- prepare all journal entries with the information provided Question

Question

Required : 1- prepare all journal entries with the information provided Question 1-12 marks Manitoba Deck System Corporation (MDSC) is a public company whose shares are actively traded on the Toronto Stock Exchange. Its Balance Sheet as at year end December 31, 2016 includes the shareholders equity section as follows: Common shares, 5,000,000 shares issued and outstanding $50,000,000 S1 Preferred shares, 1,000,000 shares outstanding (since 2013), cumulative and partly participative $8,500,000 Contributed surplus on repurchase/retirement of S1 preferred shares $15,720 Contributed surplus on repurchase/retirement of common shares $84,000 Contributed surplus on expired options-common shares $65,000 Retained earnings $27,500,000 During the fiscal year ended December 31, 2017 in the following transactions took place: 1. January 1: Purchased and retired 50,000 common shares for S12.5 per share. 2. February 1: the company issued 35,000 common shares having a market value of $8.40 for the purchased of an equipment having an appraisal value of $300,000. March 1: Issue of subscription for 200,000 common shares at $9.50 per share. Subscribers were to pay $3 per share on March I (the issue was fully subscribed) and the balance on July 1. 3. July 1: 100,000 subscribers failed to pay the second instalment and forfeited their initial deposit to the company. The rest paid the second instalment of S6.50 per share subscribed. Shares were issued after full payment was received on the shares subscribed and paid 4. August 1: Declared and distributed a 10% stock dividend on common shares valued at S11.00 per share after the dividend (ex-dividend) 5. December 31: Declared a cash dividend of s20 million to all shares outstanding as at December 31·The preferred shares participate in any excess dividend with common shares after the common sharcholders initially receive $1.50 per common share. No dividends had been declared for 2015 and 2014 6.

Explanation / Answer

Entries :

                      Common share account Dr.   500000

                      Premium account dr              125000

                             To bank                                         625000

                    (50000 CS purchased @ 12.5)

                   Equipment a/c Dr. 294000

                    Premium account Dr. 46000

                     To Common stock                      350000

                    (Equipment is of 35000*8.40)

                    Common stock application money account Dr.1900000

                    Premium (discount) A/c Dr.   100000

                              To Common Stock       2000000

                  Bank account Dr.      600000

                        To Share Application                600000

                         Common stock account dr           1000000

                                 To forfeiure reserve account               300000

                                  To share application money              650000

                                  To premium (Discount)                       50000

                                   bank account    Dr     650000

                                         To share application money account    650000

                                        Dividend account Dr. 5085000

                                              To bank                               5085000

                                          (5000000-50000+35000+100000)

Dec .31

                   5085000 Common stock @ 1.5 each         7627500

                  and to preferred Shares for 14-15-16 -    3000000*1.5 =   4500000

                Preferred will also get 7872500 (20000000-7627500-4500000)

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