PROBLEM 11-4A

(a)

Feb. 1 Cash Dividends (60,000 X $1)

60,000
Dividends Payable .....................................

60,000

Mar. 1 Dividends Payable ............................................. 60,000

Cash ..............................................................

60,000

Apr. 1 MemoFive-for-one share split

increases number of shares to
300,000 (60,000 X 5) and reduces
par value to $4 per share.
July 1 Share Dividends (15,000* X $7) ..................... 105,000
Ordinary Share Dividends
Distributable (15,000 X $4)................
Share PremiumOrdinary
($15,000 X $3)..........................................

60,000
45,000

*300,000 shares X .05

31 Ordinary Share Dividends Distributable ........ 60,000
Share CapitalOrdinary.........................

60,000

Dec. 1 Cash Dividends (315,000 X $.50)................... 157,500

Dividends Payable .....................................

157,500

31 Income Summary ............................................... 380,000

Retained Earnings.......................................

380,000

31 Retained Earnings ............................................. 217,500

Cash Dividends ............................................

217,500

31 Retained Earnings ............................................. 105,000

Share Dividends...........................................

105,000

(b)
Share CapitalOrdinary
Date
Explanation
Jan. 1 Balance
Apr. 1 5 for 1 splitnew par $4
July 31
Copyright 2011 John Wiley & Sons, Inc.

Ref.


Debit

Weygandt, IFRS, 1/e, Solutions Manual

Credit

60,000

Balance
1,200,000
1,200,000
1,260,000

(For Instructor Use Only)

11-41

PROBLEM 11-4A (Continued)

Share PremiumOrdinary
Date
Explanation
Jan. 1 Balance
July 1
Retained Earnings
Date
Explanation
Jan. 1 Balance
Dec. 31 Cash dividends
Dec. 31 Share dividends
Dec. 31 Net income

Ref.


Share Dividends
Date
Explanation
July 1
Dec. 31

11-42

Copyright 2011 John Wiley & Sons, Inc.

Credit
45,000

Ref.


Debit

Credit

217,500
105,000
380,000

Ordinary Share Dividends Distributable

Date
Explanation
Ref.
July 1
31

Cash Dividends
Date
Explanation
Feb. 1
Dec. 1
Dec. 31

Debit

Ref.

Debit

Credit
60,000

60,000

Debit
60,000
157,500

Credit

217,500

Ref.

Debit
105,000

Credit
105,000

Weygandt, IFRS, 1/e, Solutions Manual

Balance
200,000
245,000

Balance
500,000
282,500
177,500
557,500

Balance
60,000
0

Balance
60,000
217,500
0

Balance
105,000
0

(For Instructor Use Only)

PROBLEM 11-4A (Continued)

(c)

GALACTICA CORPORATION
Equity
Share capitalordinary, $4 par value, 315,000
shares issued and outstanding ......................................
Share premiumordinary ...................................................
Retained earnings...................................................................
Total equity ...............................................................

Copyright 2011 John Wiley & Sons, Inc.

Weygandt, IFRS, 1/e, Solutions Manual

$1,260,000
245,000
557,500
$2,062,500

(For Instructor Use Only)

11-43