The following information is extracted from the statements of financial position of WestJet Airlines. All amounts are in thousands of Canadian dollars.

Transcribed Image Text:

December 31, 2015 December 31, 2014 Shareholders' Equity Share capital Retained earnings Other components Total shareholders' equity $ 582,796 $ 603,287 1,292,581 1,102,300 84,626 $1,959,993 71,915 $1,777,502 Net earnings for the year ended December 31, 2015, is $367,530. WestJet reported the following information in the notes to its 2015 financial statements: During the year ended December 31, 2015, the Corporation purchased and cancelled a total of 4,719,690 shares (December 31, 2014 - 1,435,150) for total consideration of $123,813 (December 31, 2014 - $39,431). The average book value of the shares repurchased was $4.73 per share (December 31, 2014- $4.70) and was charged to share capital. The excess of the market price over the average book value, including transaction costs, was $101,489 (December 31, 2014 - $32,680) and was charged to retained earnings. Required: 1. Prepare the journal entry to record the share repurchase transaction. 2. Why do you think WestJet decided to repurchase the shares? Explain. 3. Did WestJet declare any dividends during fiscal year 2015? If so, compute the amount of divide declared by the company? December 31, 2015 December 31, 2014 Shareholders' Equity Share capital Retained earnings Other components Total shareholders' equity $ 582,796 $ 603,287 1,292,581 1,102,300 84,626 $1,959,993 71,915 $1,777,502 Net earnings for the year ended December 31, 2015, is $367,530. WestJet reported the following information in the notes to its 2015 financial statements: During the year ended December 31, 2015, the Corporation purchased and cancelled a total of 4,719,690 shares (December 31, 2014 - 1,435,150) for total consideration of $123,813 (December 31, 2014 - $39,431). The average book value of the shares repurchased was $4.73 per share (December 31, 2014- $4.70) and was charged to share capital. The excess of the market price over the average book value, including transaction costs, was $101,489 (December 31, 2014 - $32,680) and was charged to retained earnings. Required: 1. Prepare the journal entry to record the share repurchase transaction. 2. Why do you think WestJet decided to repurchase the shares? Explain. 3. Did WestJet declare any dividends during fiscal year 2015? If so, compute the amount of divide declared by the company?

Answer rating: 100% (QA)

Answer In the books of Westjet Airlines Ltd Journal entriesExtract 1 Share capitalDr 2232413370 Loss ... View the full answer