Common shares and preferred shares

Radford Corporation's charter authorized 1 million $11 par value common shares, and 300,000 6% cumulative and non-participating preferred shares, with a par value of $100 per share. The corporation made the following share transactions through December 31, 2020: 300,000 common shares were issued for $3.6 million and 10,000 preferred shares were issued for machinery valued at $1,475,000. Subscriptions for 10,500 common shares have been taken, and 30% of the subscription price of $16 per share has been collected. The shares will be issued upon collection of the subscription price in full. In addition, 10,000 common shares have been repurchased for $15 and retired. The Retained Earnings balance is $180,000 before considering the transactions above.

a. Prepare the shareholders' equity section of the SFP in good form.
b. Repeat part (a) assuming the common shares and preferred shares are no par.
c. Discuss the alternative presentations of the Share Subscriptions Receivable account. Would the presentation of the receivable affect the book value or the rate of return on shareholders equity?


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