Southern, Inc. had the following shareholders equity on November 30: Shareholders Equity Share Capital: Common Shares, unlimited

Question:

Southern, Inc. had the following shareholders’ equity on November 30:

Shareholders’ Equity

Share Capital:

Common Shares, unlimited number of shares authorized,

40,000 shares issued and 30,000 outstanding ...........$480,000

Contributed Surplus (purchase of treasury shares, May 30).... 20,000

Retained Earnings................... 520,000

Less: 10,000 Treasury Shares ................(120,000)

Total Shareholders’ Equity.................$900,000

On December 10, Southern purchased 5,000 treasury shares at $15 per share.

Requirement

1. What is the average price per common share? What is the amount paid to purchase treasury shares on May 30?

2. Journalize the purchases of the treasury shares on May 30 and December 10.

3. Prepare the shareholders’ equity section of the balance sheet at December 31.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...