Washington Company has the following equity accounts at December 31, 2019. Share Capital-Ordinary-$100 par value, authorized 8,000

Question:

Washington Company has the following equity accounts at December 31, 2019.
Share Capital-Ordinary-$100 par value, authorized 8,000 shares....................$480,000
Retained Earnings................................................................................294,000
Instructions
a. Prepare entries in journal form to record the following transactions, which took place during 2020.
1. 280 ordinary shares were purchased at $97 per share. (These are to be accounted for using the cost method.)
2. A $20 per share cash was declared.
3. The declared in No. 2 above was paid.
4. The treasury shares purchased in No. 1 above were resold at $102 per share.
5. 500 shares were purchased at $105 per share.
6. 350 of the shares purchased in No. 5 above were resold at $96 per share.
b. Prepare the equity section of Washington Company's statement of financial position after giving effect to these transactions, assuming that the net income for 2020 was $94,000. Country law requires restriction of retained earnings for the amount of treasury shares.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...