Dirk SA reported the following balances at December 31, 2019: share capitalordinary 500,000, share premiumordinary 100,000, and

Question:

Dirk SA reported the following balances at December 31, 2019: share capital—ordinary €500,000, share premium—ordinary €100,000, and retained earnings €250,000. During 2020, the following transactions affected equity.

1. Issued preference shares with a par value of €125,000 for €200,000.
2. Purchased treasury shares (ordinary) for €40,000.
3. Earned net income of €180,000.
4. Declared and paid cash dividends of €56,000.

Instructions
Prepare the equity section of Dirk SA’s December 31, 2020, statement of financial position.

Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...

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