Reference no: EM132538596
ABC Company has two classes of share capital outstanding. At December 31, 2018, the following accounts were included in equity.
Share Capital-Preference, 8%, 100,000 shares issued and outstanding $ 40,000,000
Share Capital-Ordinary, 4,000,000 shares issued and outstanding $ 80,000,000
Share Premium-Preference $ 1,600,000
Share Premium-Ordinary $ 35,000,000
Retained Earnings $ 15,000,000
The following transactions affected equity during 2018
Jan 11 Issued 200,000 ordinary shares at $32 per share.
Feb 1 Issued 5,000 preference shares for the following assets: machinery with fair value of $500,000; a factory building with a fair value of
$700,000; and land with an appraised value of $1,200,000.
July 1 Purchased 60,000 ordinary shares at $30 per share (Use cost method).
Aug 1 2-for-1 share split (ordinary and preference)
Aug 10 Sold the 100,000 treasury shares at $18 per share.
Nov 1 Declared a 5% share dividend on the outstanding shares when the shares are selling for $13 per share.
Dec 31 Issued the share dividend declared on Nov 1.
Dec 31 Net income is $3,200,000.
Instructions:
Question a. Record the journal entries for the transactions listed above.
Question b. Prepare the equity section of the statement of financial position for Paris Company at December 31, 2019.
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