Part 1

Required

Answer the following questions regarding Danier Leather.

a. Did retained earnings increase or decrease from June 26, 2010, to June 25, 2011?

b. A review of the statement of changes in equity shows a share repurchase during the year ended

June 25, 2011. Explain what a share repurchase is.

c. Prepare the entry that might have been recorded regarding the share repurchase.

Part 2

Required

Answer the following questions regarding High Liner Foods.

a. A review of High Liner’s statement of changes in equity shows that it repurchased shares originally recorded at $710,000 with a resulting $511,000 reduction in contributed surplus. Were these shares repurchased for more or less than what they were originally issued for? Reconstruct the possible journal entry regarding this repurchase.

b. High Liner Foods shows a balance in contributed surplus at December 31, 2011. What is that balance? Explain what might have created this balance.