QUESTION $1$

Required:

$1\mathrm{.}1$ Prepare the journal entries to record the transactions of Canada Ltd$.($Show all workings.$)$

$1\mathrm{.}2$ Prepare the equity section as at December $2022.$

Answer the question in the space provided below.

Canada Ltd has been authorised to issue $800000$ $$50$ par value, $10\%$ no$-$par non$-$cumulative preference shares and $2000000$ no$-$par ordinary shares. The company assigned a $$5\mathrm{.}00$ stated value to the ordinary shares. On $31$ December $2022,$ 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 $300000$

$50000$

$3000000$

$600000$

$10000$

$1000$

$200000$

Additional information:

The preference shares were issued for land having a fair value of $$350000.$

All the ordinary shares were issued for $$6\mathrm{.}00$ cash.

On $1$ November, $1500$ ordinary shares that were stated at $$5,$were purchased for the treasury at a cost of $$9$ per share.

In December, $600$ treasury shares were sold for $$11$ per share.

No dividends were declared in $2022.$