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Tamarisk Ltd. is a Canadian publicly-traded business with a December 31 fiscal year end. In order to get a better return on some of its excess cash, Tamarisk purchased 240 common shares of AFS Corporation on July 1, 2017 at a price of $4.76 per share. On the day of acquisition, Tamarisk elected to account for the investment using the fair-value through other comprehensive income (FV-OCI) without recycling model. On August 1, 2017, AFS declared dividends of $0.90/share, and paid those dividends on August 20, 2017. On December 31, 2017, shares in AFS were trading at $6.40 per share. On September 15, 2018, Tamarisk sold the shares in AFS for $7.40 per share. Prepare the journal entries required to record the above transactions on the books of Tamarisk Ltd.

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Elin Hessel
Elin HesselLv2
28 Sep 2019

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Use the following information for Midge Inc. to complete the requirements below.

Foran Inc. Shareholder’s Equity

As at Dec. 31, 2016

Common Shares, no-par; 500,000 shares authorized; 80,000 issued and outstanding

$600,000

Retained Earnings

1,000,000

Total Shareholders’ Equity

$1,600,000

2017 Transactions:

Mar

3

Issued 5,000 common shares at $20 per share.

June

11

Declared a cash dividend of $0.25 per share to common shareholders of record on June 25, payable on July 6.

Aug.

21

Declared a 5% stock dividend to common shareholders of record on September 5, distributable on September 20. The shares were trading for $22 a share on August 21, $24 on September 5, and $26 on September 20.

Nov.

1

Issued 3,000 common shares at $25 per share.

Dec.

20

Declared a cash dividend of $0.30 per share to common shareholders of record on December 31, payable on January 10.

2017 Net Income: $217,610

Required

A)

i) Record the above transactions for 2017. (Note: Closing entries are not required.)

ii) Prepare the Shareholders’ Equity section of their financial statements as at Dec. 31, 2017.

B) Feng Corporation has 10,000 Common shares Issued when it announces a 3-for-1 split. Before the split, the shares were trading for $120 per share.

i) After the split, how many shares will be Issued?

ii) How should Feng Corporation record the share split?

iii) Just following the split, what will be the likely share price?

Grouper Corp. has the following portfolio of securities acquiredfor trading purposes and accounted for using the FV-NI model atSeptember 30, 2017, the end of the company’s third quarter:

Investment Cost Fair Value 48,000 common shares of Yuen Inc.$273,600 $192,000 3,300 preferred shares of Monty Ltd. 125,400132,000 1,400 common shares of Oakwood Inc. 126,000 125,300

On October 8, 2017, the Yuen shares were sold for $5.70 pershare. On November 16, 2017, 3,000 common shares of Patriot Corp.were purchased at $43.90 per share. Grouper pays a 1% commission onpurchases and sales of all securities. At the end of the fourthquarter, on December 31, 2017, the fair values of the shares heldwere as follows: Monty $102,200; Patriot $117,000; and Oakwood$142,100. Grouper prepares financial statements every quarter.Assume Grouper follows IFRS 9 and does not recognize dividends andother investment income accounts separately. Required:

a) Prepare the journal entries to record the sale, purchase, andadjusting entries related to the portfolio for the fourth quarterof 2017.

b) Indicate how and where the investments would be reported onthe December 31, 2017 statement of financial position.

Trask Corporation, a public company whose shares are traded in the over-the-counter market, had the following shareholders' equity account balances at December 31, 2016:

Common stock $7,875,000

Additional paid-in capital (including stock options) $16,050,000

Retained earnings $16,445,000

Treasury common stock $750,000

Transactions during 2017 and other information relating to the shareholders' equity accounts follow:

As of January 1, 2017, Trask had 4,000,000 authorized shares of $5 par-value common stock; it had issued 1,575,000 shares of which 75,000 were held in treasury.

On January 21, 2017, Trask issued 50,000 shares of $100 par value, 6% cumulative preferred stock at par in exchange for all of Rover Company's assets and liabilities. On that date, the net carrying amount of Rover's assets and liabilities equaled their fair values.

On January 22, 2017, Rover distributed the Trask shares to its stockholders in a complete liquidation and dissolution of Rover. Trask had 150,000 authorized shares of preferred stock.

On February 17, 2017, Trask formally retired 25,000 of 75,000 treasury common stock shares. The shares were originally issued at $15 per share and had been acquired on September 25, 2016, for $10 per share.

Trask owned 15,000 shares of Harbor Inc. common stock purchased in 2016 for $600,000. The Harbor stock shares are carried t fair value with price changes included in net income. On March 5, 2017, Trask declared a property dividend of one share of Harbor common stock for every 100 shares of Trask common stock held by a shareholder of record on April 16, 2017. Harbor stock's market price on March 5, 2017, was $60 per share. The property dividend was distributed on April 29, 2017.

On January 2, 2012, Trask granted stock options to employees to purchase 200,000 shares of the company's common stock at $12 per share, which was also the market price on that date. The options had a grant date fair value of $1.50 per share and are exercisable within a three-year period, beginning January 2, 2017. On June 1, 2017, employees exercised 150,000 options when the stock's market value was $25 per share. Trask issued new shares to settle the transaction.

On December 12, 2017, Trask declared the yearly cash dividend on preferred stock, payable on January 11, 2018, to shareholder of record on December 31, 2017.

On January 16, 2018, before the accounting records were closed for 2017, Trask learned that depreciation expense had been understated by $350,000 for the year ended December 31, 2016. The after-tax effect on 2016 net income was $245,000. The appropriate correcting entry to adjust January 1, 2017 retained earnings was recorded on the same day.

Net income for 2017 was $2,400,000.

Required:

Prepare a schedule to show how Trask's retained earnings changed from January 1, 2017, to December 31, 2017.

Prepare the shareholders' equity section of Trask's balance sheet at December 31, 2017.

Compute the book value per share of common stock at December 31, 2017

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