1 Prepare the journal entries to record the transactions of Canada Ltd. (Show all workings.) 2...

 

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1 Prepare the journal entries to record the transactions of Canada Ltd. (Show all workings.) 2 Prepare the equity section at December 2020 Answer the question in the space provided below. Canada Ltd has been authorised to issue 20 000 $100 par value, 10% non-cumulative no preference shares and 1 000 000 no-par ordinary shares. The company assigned a $2.50 stated value to the ordinary shares. At 31 December 2020, the ledger contained the following balances pertaining to equity: Share capital – Preference Share premium - Preference Share capital – Ordinary Share premium - Ordinary Treasury shares - Ordinary Share premium - Treasury Retained Earnings 120 000 12 000 1 000 000 1 600 000 9 000 1 000 82 000 Additional information: The preference shares were issued for land having a fair value of $132 000. All the ordinary shares were issued for cash. On 1 November, 1 500 ordinary shares were purchased for the treasury at a per share cost of $9. In December, 500 treasury shares were sold for $11 per share. No dividends were declared in 2020. 1 Prepare the journal entries to record the transactions of Canada Ltd. (Show all workings.) 2 Prepare the equity section at December 2020 Answer the question in the space provided below. Canada Ltd has been authorised to issue 20 000 $100 par value, 10% non-cumulative no preference shares and 1 000 000 no-par ordinary shares. The company assigned a $2.50 stated value to the ordinary shares. At 31 December 2020, the ledger contained the following balances pertaining to equity: Share capital – Preference Share premium - Preference Share capital – Ordinary Share premium - Ordinary Treasury shares - Ordinary Share premium - Treasury Retained Earnings 120 000 12 000 1 000 000 1 600 000 9 000 1 000 82 000 Additional information: The preference shares were issued for land having a fair value of $132 000. All the ordinary shares were issued for cash. On 1 November, 1 500 ordinary shares were purchased for the treasury at a per share cost of $9. In December, 500 treasury shares were sold for $11 per share. No dividends were declared in 2020.

Answer rating: 100% (QA)

Solution 11 Journal entry Date Detail Debit Credit Land 13200000 12000000 1200000 Share capitalPrefe... View the full answer