problem 1 (Retirement, Conversion and Treasury Shares)

The shareholders equity of Adana Publishing Company shows the following balances:

5% Preference Share Capital, P 50 par value,

20,000 issued and outstanding shares P 1,000,000

Ordinary Share Capital, P 20 stated value

100,000 issued and outstanding shares P 2,000,000

Preference Share Premium 300,000

Ordinary Share Premium 400,000

Retained Earnings 1,250,000

The following transactions occurred:

1. 1,000 preference shares were retired at P 78 per share.
2. Another 800 preference shares were retired at P 62 per share.
3. 2,000 preference shares were converted into ordinary shares with a ratio of 1 PS into 4 shares.
4. 1,500 preference shares were converted into ordinary shares with a ratio of 1 PS into 6 shares.
5. Reacquired 2,000 ordinary shares at P 23 per share.
6. Reissued all the treasury shares at P 21 per share.

Requirements:

1. Prepare the journal entries for the transactions occurred.
2. Prepare the Shareholders Equity at year-end.