At 31 July 20X9, the statement of financial position of Winder Engineering plc showed the following position:

The preference shares were originally issued at a premium of 10 per cent, and are redeemable at a premium of 5 per cent at any time during 20X9. The company decided it would redeem the preference shares. All transactions in respect of shares are as follows:

Required
a. Prepare the necessary journal entries to record the above transactions.
b. Prepare a statement of financial position at 30 September 20X9 which incorporates these changes.

Transcribed Image Text:

ASSETS Sundry assets Cash Total assets EQUITY AND LIABILITIES Equity 200,000 equity £1 shares Share premium Retained earnings Total equity Non-current liabilities 80,000 10 per cent redeemable cumulative preference shares of £1 each Total liabilities Total equity and liabilities £ 380,000 60,000 440,000 200,000 20,000 140,000 360,000 80,000 80,000 440,000