Elgin Company had the following shareholders’ equity account balances on December 31, 2021:

During 2022, the following transactions occurred:
i. May 1: Elgin resold 800 of the treasury shares at $48 per share.
ii. December 30: The board of directors declared cash dividends of $2 per share payable on January 15, 2023.
iii. December 31: Net income for the year ended December 31, 2022, was $120,000.
Elgin uses the single-transaction method for treasury shares.

Required:

a. Assume that Elgin follows the guidance in ASPE pertaining to accounting for equity transactions. Record the journal entries for the transactions in 2022 and make all the necessary year-end entries relating to shareholders’ equity accounts.

b. Prepare the presentation of the shareholders’ equity section of Elgin’s balance sheet as at December 31, 2022.

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Common stock, no par, 40,000 shares authorized, 30,000 issued Contributed surplus on repurchases and resales Treasury shares, 5,000 shares Retained earnings Total shareholders' equity $720,000 25,000 (165,000) 350,000 $930,000