3. Following is given the total equity of Anchor Plc. for the year ended 31...
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3. Following is given the total equity of Anchor Plc. for the year ended 31 December 2020. Total Equity: $ Common stock of $5 each 200000 100000 Share premium Retained earning Asset revaluation surplus 150,000 100000 Total Amount 550000 The following events occurred during the year ended 31 December 2021. (i) The company issued 10,000 new shares at $10 per share. (ii) The company earned net income of $120,000 for the year 2021. (iii) The company declared dividend at $4 per share. The company considered all the shares to be eligible for dividend. Out of the total dividend, the company paid 50% cash dividend and 50% stock dividend. (iv) The company bought 5000 shares from shareholders at $10 per share as treasure stocks. a) Write up the total equity of the company for the year ended 31 December 2021 after considering the above events. You will show necessary working. b) Explain in brief why companies issue treasury stock. (11) (4)
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