Corporation
Soal 1
Choi Limited had the following equity accounts on January 1, 2023: Share Capital-Ordinary ($5)
$650,000, Share Premium-Ordinary $150,000, and retained earnings $200,000. In 2023, the
company had the following treasury share transactions.
Mar. 1 Purchased 9.000 shares at $9 per share.
June. 1 Sold 3000 shares at $12 per share.
Sept. 1 Sold 2.500 shares at $10 Per share
Dec. 1 Sold 2.000 shares at $6 per share
Choi uses the cost method of accounting for treasury shares. In 2023, t
Instruction:
a. Journalize the treasury share transactions, and prepare the closing entry at December 31,
2023, for net income
b. Open accounts for (1) Share Premium-treasury, (2) treasury shares, and (3) retained
earnings, post these accounts into T Account. Prepare the equity section for Choi Limited
at December 31, 2023.
Soal 2
Jennie SA reported the following balances at December 31, 2021: share capital—ordinary
€750,000 (€5, 150,000 shares), share premium—ordinary €150,000, and retained earnings
€250,000. During 2022, the following transactions affected equity.
1 April, Purchased treasury shares (ordinary) for €60,000 (€10)
4 June, Issued preference shares with a par value of €90,000 (€9, 10,000 shares) for €135,000.
27 Sept, Issued preference shares with a par value of €54,000 (€9, 6000 shares) for €72,000.
30 Oct, Declared cash dividends of €0.5 on 16,000 shares of preferred stock and €1 on the
common stock to stockholders of record on 5 Nov, payable on 29 Nov.
29 Nov, Paid cash dividend
Instructions
Prepare journal and the equity section of Jennie SA’s December 31, 2022, statement of financial
position.
Soal 3
Dirk SA reported the following balances at December 31, 2019: share capital—ordinary
€500,000, share premium—ordinary €100,000, and retained earnings €250,000. During 2020, the
following transactions aff ected equity.
1. Issued preference shares with a par value of €125,000 for €200,000.
2. Purchased treasury shares (ordinary) for €40,000.
3. Earned net income of €180,000.
4. Declared and paid cash dividends of €56,000.
Instructions
Prepare the equity section of Dirk SA’s December 31, 2020, statement of financial position.
Soal PR
Selected transactions completed by ATV Corporation during the 2023 are as follows:
Jan. 5. Split the common stock 4 for 1 and reduced the par from $20 to $5 per share.
After the split, there were 4,000,000 common shares outstanding.
Mar. 10. Purchased 100,000 shares of the corporation’s own common stock at $30,
recording the stock at cost.
Apr. 30. Declared cash dividends of $0.25 on 30,000 shares of preferred stock
and $0.08 on the common stock to stockholders of record on May 15, payable
on June 15.
June 15. Paid the cash dividends.
Aug. 20. Sold 60,000 shares of treasury stock at $40, receiving cash.
Oct. 15. Declared semiannual dividends of $0.25 on the preferred stock and $0.08
on the common stock (before the stock dividend). In addition, a 1% common
stock dividend was declared on the common stock outstanding. The fair market value
of the common stock is estimated at $35. The dividend date of record is
November 15 payable on December 19.
Dec. 19. Paid the cash dividends and issued the certificates for the common stock
dividend.
Instructions
Journalize the transactions.
