Chapter 1 Problem 10-21 to 25
Problem 10-21 Answer D
Cash dividend (10% x 500,000) 50,000
Problem 10-22 Answer A
Dividend income (2,000 x 60) 120,000
Problem 10-23 Answer C
Sales price (80,000 x 30) 2,400,000
Less: Cost of shares sold (80,000 x 40) 3,200,000
Loss on disposal ( 800,000)
Problem 10-24 Answer A
June 1 December 1
Original shares 20,000 30,000
Stock dividend – 20% 4,000 6,000
Total shares 24,000 36,000
Sales price (30,000 x 125) 3,750,000
Cost of shares sold:
From June 1 – 24,000 shares 2,000,000
From December 1 – 6,000 shares (6,000 / 36,000 x 3,600,000) 600,000 2,600,000
Gain on sale 1,150,000
Problem 10-25 Answer B
Cost of rights (5/100 x 8,000,000) 400,000
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