Chapter 6
Corporations: Contributed Capital and Dividends
265
AP-4A (
3
)
The shareholders’ equity of Thomas Inc. at March 31, 2016 is shown below.
Additional Information
• The preferred shares have an average issue price of $5.00 per share.
• The common shares have an average issue price of $3.00 per share.
Fill in the grey areas in the table below with the correct numbers.
Thomas Inc.
Shareholders' Equity
As at March 31, 2016
Share Capital
Preferred Shares, 280,000 shares authorized, 23,000 shares issued and outstanding
Common Shares, unlimited shares authorized, 120,000 shares issued and outstanding
Total Share Capital
475,000
Retained Earnings
Total Shareholders' Equity
$533,675
Analysis
A corporation has the choice to issue only common shares or issue mainly preferred shares.
(All corporations must have at least one class of common shares outstanding). If you were a
director on the board of a newly incorporated, fast-growing corporation, which is planning to
issue shares to the general public, what type of shares would you suggest the management to
issue?
