SOLUTIONS TO PROBLEMS

PROBLEM 11-1A

(a) Jan. 10

Cash (100,000 X HK$30) ............................ 3,000,000

Share CapitalOrdinary
(100,000 X HK$20) ...........................
2,000,000
Share PremiumOrdinary
(100,000 X HK$10) ...........................
1,000,000

Mar. 1

Cash (10,000 X HK$550) ............................ 5,500,000

Share CapitalPreference
(10,000 X HK$500) ...........................
5,000,000
Share PremiumPreference
(10,000 X HK$50) ............................
500,000

Apr. 1

Land .................................................................
Share CapitalOrdinary
(25,000 X HK$20) .............................
Share PremiumOrdinary
(HK$850,000 HK$500,000) .........

850,000
500,000
350,000

May 1

Cash (75,000 X HK$40)............................... 3,000,000

Share CapitalOrdinary
(75,000 X HK$20) .............................
1,500,000
Share PremiumOrdinary
(75,000 X HK$20) .............................
1,500,000

Aug. 1

Organization Expense................................
Share CapitalOrdinary
(10,000 X HK$20) .............................
Share PremiumOrdinary
(HK$500,000 HK$200,000) .........

500,000

Cash (5,000 X HK$60).................................

Share CapitalOrdinary
(5,000 X HK$20)................................
Share PremiumOrdinary
(5,000 X HK$40)................................

300,000

Sept. 1

Copyright 2011 John Wiley & Sons, Inc.

Weygandt, IFRS, 1/e, Solutions Manual

200,000
300,000

100,000
200,000

(For Instructor Use Only)

11-33

PROBLEM 11-1A (Continued)

Nov. 1

Cash (2,000 X HK$580) ................................ 1,160,000

Share CapitalPreference
(2,000 X HK$500) ...............................
1,000,000
Share PremiumPreference
(2,000 X HK$80) ................................
160,000

(b)
Share CapitalPreference
Date
Explanation
Mar. 1
Nov. 1

Ref.
J1
J1

Debit

Credit
5,000,000
1,000,000

Balance
5,000,000
6,000,000

Share CapitalOrdinary
Date
Explanation
Jan. 10
Apr. 1
May 1
Aug. 1
Sept. 1

Ref.
J1
J1
J1
J1
J1

Debit

Credit
2,000,000
500,000
1,500,000
200,000
100,000

Balance
2,000,000
2,500,000
4,000,000
4,200,000
4,300,000

Share PremiumPreference
Date
Explanation
Mar. 1
Nov. 1

Ref.
J1
J1

Debit

Credit
500,000
160,000

Balance
500,000
660,000

Share PremiumOrdinary
Date
Explanation
Jan. 10
Apr. 1
May 1
Aug. 1
Sept. 1

Ref.
J1
J1
J1
J1
J1

Debit

Credit
1,000,000
350,000
1,500,000
300,000
200,000

Balance
1,000,000
1,350,000
2,850,000
3,150,000
3,350,000

11-34

Copyright 2011 John Wiley & Sons, Inc.

Weygandt, IFRS, 1/e, Solutions Manual

(For Instructor Use Only)

PROBLEM 11-1A (Continued)

(c)

GAO CORPORATION
Equity
Share capitalpreference
6%, HK$500 par value,
20,000 shares authorized,
12,000 shares issued .................................
Share capitalordinary, no par,
HK$20 stated value,
500,000 shares authorized,
215,000 shares issued...............................
Share premiumpreference........................
Share premiumordinary ............................
Total share capital .........................

Copyright 2011 John Wiley & Sons, Inc.

Weygandt, IFRS, 1/e, Solutions Manual

HK$6,000,000

4,300,000
660,000
3,350,000
HK$14,310,000

(For Instructor Use Only)

11-35