Shrek Inc., had issued subscriptions for common shares on March 1, 2020. 40% of the subscription was to be paid by the subscribers on April 1 and the balance on June 1. The company would thereafter issue the shares on June 15. On April 1, the company received the funds for the first instalment and prepared the following journal entry to record the transaction:DRCash$446,400 CRShare Subscription Receivable $446,400On June 1, 2,000 subscribers failed to pay the second instalment and their subscriptions were forfeited. The company received the funds due on the second instalment from the remaining subscribers and prepared the following journal entry to record the transaction: DR Cash $648,000CR Share Subscription Receivable $648,000 For how many shares were subscriptions issued by Shrek on March 1, 2020? Select one:a.62,000.b.60,000.c.64,000.d.37,200.e.None of the above.

Shares: Shares are the units of the total stock of a company that shows the fractional ownership of…

Answered: Shrek Inc., had issued subscriptions…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Shrek Inc., had issued subscriptions for common shares on March 1, 2020. 40% of the subscription was to be paid by the subscribers on April 1 and the balance on June 1. The company would thereafter issue the shares on June 15.

On April 1, the company received the funds for the first instalment and prepared the following journal entry to record the transaction:

DR	Cash	$446,400
CR	Share Subscription Receivable		$446,400

On June 1, 2,000 subscribers failed to pay the second instalment and their subscriptions were forfeited. The company received the funds due on the second instalment from the remaining subscribers and prepared the following journal entry to record the transaction:

DR Cash $648,000

CR Share Subscription Receivable $648,000

For how many shares were subscriptions issued by Shrek on March 1, 2020?

Select one:

62,000.

60,000.

64,000.

37,200.

None of the above.

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