Scribd
Upload
20 views6 pages

Preference Share Capital Analysis

The document outlines financial transactions related to preference and ordinary share capital, including conversions and redemptions, as well as income statements for Dunhill Company for six months ended June 30, 2021. It details the recording of preference shares, accrued interest, and net income calculations. Additionally, it provides a breakdown of cost of goods sold and gross profit across different quarters.

Uploaded by

Vhalazar Duaves Lisama
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
20 views6 pages

Preference Share Capital Analysis

The document outlines financial transactions related to preference and ordinary share capital, including conversions and redemptions, as well as income statements for Dunhill Company for six months ended June 30, 2021. It details the recording of preference shares, accrued interest, and net income calculations. Additionally, it provides a breakdown of cost of goods sold and gross profit across different quarters.

Uploaded by

Vhalazar Duaves Lisama
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Preference Share Capital, P100 par, 50,000 shares

Share Premium – PS
Ordinary Share Capital, P100 par, 100,000 shares
Share Premium – OS
Retained earnings
Req. 1
Preference share capital 500,000
Share premium -PS 50,000
Ordinary share capital (50 x 5,000) 250,000
Share premium- OS 300,000
to record the conversion

Preference share capital 500,000


Share premium-PS 50,000
Retained Earnings 450,000
Ordinary share capital ( 50 x 5K x 4) 1,000,000
to record the conversion

Req. 2
a. 120 par of 5,000 shares
Preference share capital 500,000
Share premium-PS 50,000
Retained Earnings 50,000
Cash (5,000 x 120) 600,000
to record the preference share of 120

B. 80 par of 5,000 shares


Preference share capital 5k x 100 500,000
Share premium-PS 50,000
Cash (5,000 x 80) 400,000
Share premium- OS 150,000
to record the preference share of 80
5,000,000
500,000
5,000,000
1,000,000
2,000,000

Cash 450,000
Preference share 5,000 x 100 500,000
share premium 50,000
Jan.1 2020
Cash 5,000,000
Redeemable prefrence share 5,000,000

December 31 2020
Interest expense 500,000
Accrued interest payable (5M x 10%) 500,000
to record accrued interest

December 31. 2021


Interest Expense 550,000
Accrued interest expense (5.5M x 10%) 550,000
to record accrued interest

Jan1. 2022
Redeemable Preference Share 5,000,000
Accrued Interest Payable 1,050,000
Cash 6,050,000
to record redemption
Req. 1 Dunhill company
Income Statement
Six months ended June 30, 2021

Sales 20,000,000
Cost of sale 11,500,000
Gross profit 8,500,000
Interest Income 250,000
Dividends Revenue 500,000
Gross income 9,250,000
Expenses:
Distribution cost -2,500,000
General Expense -1,100,000
Depreciation -700,000
Interest Income -300,000
Income before tax 4,650,000
Income Tax 30% (expense) -1,300,000
Net income 3,350,000
Req. 2 Dunhill company
Income Statement
Six months ended June 30, 2021

Sales 12,500,000
Cost of sale 7,000,000
Gross profit 5,500,000
Interest Income 250,000
Dividends Revenue 200,000
Gross income 5,950,000
Expenses:
Distribution cost -1,600,000
General Expense -600,000
Depreciation -300,000
Interest Income -200,000
Income before tax 3,250,000
Income Tax 30% (expense) -900,000
Net income 2,350,000
1st 2nd 3rd 4th
COGS before -7,000,000 -4,700,000 -4,900,000 -13,400,000
Inventory loss -100,000 -150,000
Gain on reversal 100,000 150,000
CogS after -7,100,000 -4,600,000 -5,050,000 -13,250,000 req.1
Sales 10,000,000 8,000,000 7,000,000 15,000,000
Gross profit 2,900,000 3,400,000 1,950,000 1,750,000 req.2

You might also like