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The following balances in its shareholders’ equity at 1 January: Contributed equity (450 0000 ordinary shares)   $2 100...

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Accounting

The following balances in itsshareholders’ equity at 1 January:

Contributed equity (450 0000 ordinary shares)   $2100 000

Retained earnings 2 225 000

During the year the business had the following transactions

1 Mar. Issued 200 000 ordinary shares for cash at $8 pershare.

1 Jul.   Declared a 1 for 10 share dividend, payable 1August. The shares were trading at $7 per share on 1 July.


15 Aug.    Declared a $0.50 per share cash dividendof record on 1 September, payable 15 September.


1 Oct.   Declared a $0.50 per share cash dividend ofrecord on 1 September, payable 15 September.

31 Dec. Bought back 6000 ordinary shares for $45 000. Calculatedtotal comprehensive income for the year to be $520 000.


Required
a   Prepare the journal entries to record thetransactions.

b   Prepare the company's 31 December shareholders’equity section.

c   Calculate earnings per share for the year.

Answer & Explanation Solved by verified expert
3.9 Ratings (614 Votes)
Answer A Journal Entries Date Particulars DrCr Debit Amount Credit Amount 31Mar Cash Bank Account Dr 3200000 To Common Stock Ac 3200000 Being common stock issued 1Aug Retained Earning Account Dr 455000 To Common Stock 455000 Being dividend stock issued 15Aug Dividend Expense Account Dr 357500 To Dividend Payable Ac 357500 Being    See Answer
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