Elston Limited had the following equity accounts on January 1, 2017: Share Capital-Ordinary (5 par) 400,000, Share
Question:
Mar. 1 Purchased 5,000 shares at £9 per share.
June 1 Sold 500 shares at £12 per share.
Sept. 1 Sold 2,500 shares at £10 per share.
Dec. 1 Sold 1,000 shares at £6 per share.
Elston uses the cost method of accounting for treasury shares. In 2017, the company reported net income of £34,000.
Instructions
(a) Journalize the treasury share transactions, and prepare the closing entry at December 31, 2017, for net income.
(b) Open accounts for (1) Share Premium-Treasury, (2) Treasury Shares, and (3) Retained Earnings. Post to these accounts using J10 as the posting reference.
(c) Prepare the equity section for Elston Limited at December 31, 2017.
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Related Book For
Financial Accounting
ISBN: 978-1118978085
IFRS 3rd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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