Loki Limited has the following equity accounts on January 1, 2021: Share CapitalOrdinary (5 par,...
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Loki Limited has the following equity accounts on January 1, 2021: Share CapitalOrdinary (5 par, 150,000 shares issued) 750,000 Share PremiumOrdinary 250,000 Retained Earnings 120,000. In 2021, the company had the following equity related transactions. March: Issued 15,000 ordinary shares at a price of 15. May: The board of directors announced a share dividend equal to 0.50 per share. June: The dividend is paid August: The company repurchases 12,000 shares at 10 per share. September: Sold 6,000 shares at 13 per share. October: Sold 6,000 shares at 6 per share. Loki uses the cost method of accounting for treasury shares. In 2021, the company reported net income of 40,000. Instructions a. Journalize the transactions, and prepare the closing entries as of December 31, 2021, for net income and cash dividends. b. Open T-accounts for (1) Share Capital Ordinary; (2) Share Premium Ordinary; (3) Treasury Shares; (4) Share PremiumTreasury, (5) Retained Earnings. Post to these accounts (without using a posting reference). c. Prepare the equity section for Loki Limited Limited as of December 31, 2021.
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