Wajid Trading Company Ltd was organized during 2015 with an authorized capital of 100,000 Common Stock...

 

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Wajid Trading Company Ltd was organized during 2015 with an authorized capital of 100,000 Common Stock of Rs. 50 each. The company had issued 70,000 Common Stock at a premium of Rs. 20 each. The operation of company was quite successful over several years. It transferred an amount of Rs. 600,000 in revenue reserves during past. Currently it had a balance in the retained earnings of Rs. 700,000. The Boards of Directors decided to acquire 4,000 Common Stock from the market which had the prevailing market price of Rs. 100 each. The balance of Rs. 568,000 was available in the retained earnings after payment of dividends by the company. Later the company sold out the treasury stocks. Following independent situations are to be considered for the company. Required a) Pass accounting entries for purchase of treasury stock by the company and present the equity section of balance sheet of the company. Later, these stocks were sold at Rs. 100 each. Pass accounting entries and draw equity section of balance sheet of the company. b) Wajid Trading Company Ltd was organized during 2015 with an authorized capital of 100,000 Common Stock of Rs. 50 each. The company had issued 70,000 Common Stock at a premium of Rs. 20 each. The operation of company was quite successful over several years. It transferred an amount of Rs. 600,000 in revenue reserves during past. Currently it had a balance in the retained earnings of Rs. 700,000. The Boards of Directors decided to acquire 4,000 Common Stock from the market which had the prevailing market price of Rs. 100 each. The balance of Rs. 568,000 was available in the retained earnings after payment of dividends by the company. Later the company sold out the treasury stocks. Following independent situations are to be considered for the company. Required a) Pass accounting entries for purchase of treasury stock by the company and present the equity section of balance sheet of the company. Later, these stocks were sold at Rs. 100 each. Pass accounting entries and draw equity section of balance sheet of the company. b)

Answer rating: 100% (QA)

a Balance Sheet Equity Section Share Capital Authorized Capital 10000... View the full answer