Part A :

Required: Answer the following questions on share capital.

i) On January 1, 2016, ZLL Co. bought back 5,000 of its own common shares for $10.00 each and cancelled them. The balance in the Contributed Surplus (common) account before the purchase was $5,000 cr. The average cost of the outstanding common shares is $8.00. Record the journal entry to reflect ZLLs repurchase of the shares.

ii) Independent of part (i), assume on January 1, 2016, ZLL Co. bought back 5,000 of its own common shares for $6.00 each and cancelled them. The balance in the Contributed Surplus (common) account before the purchase was $5,000 cr. The average cost of the outstanding common shares is $8.00. Record the journal entry to reflect ZLLs repurchase of the shares.

Part B

WDC is a public company whose shares are actively traded on the Toronto Stock Exchange. Presented below is information related to WDC Company.

January 1, 2015: The company is granted a charter that authorizes issuances of 200,000 no-par value common shares and 100,000 no par-value preferred shares entitled to a $3.00 per share cumulative dividend.

January 10, 2015: 10,000 common shares are issued (sold) to the founders of the corporation for land that has a market value of $300,000.

March 10, 2015: 3,000 preferred shares are issued (sold) for cash for $120 each.

April 15, 2015: The company issues 100 common shares to a car dealer in exchange for a used vehicle. The asking (list) price for the car is $6,500. At the time of the exchange, the common shares were selling at $60 per share.

October 11, 2015: WDC issues (sells) 2,000 common shares and 400 preferred shares for a lump sum of $160,000 cash. At time of sale, both the common and preferred shares were actively traded. The common shares were trading at $60 each; the preferred shares at $110 each.

December 31, 2015: WDC declares cash dividends totalling $107,000, payable on January 31, 2016 to holders of record on January 15, 2016.

Required: Prepare the general journal entries to record the transactions. If no entry is required, state no entry required. Calculate the dividends per share for the common shareholders.