The following data were taken from the statement of financial position accounts of Murless Corporation on December

Question:

The following data were taken from the statement of financial position accounts of Murless Corporation on December 31, 2010.

Current Assets .................................................. R540,000

Investments ...................................................... 624,000

Share Capital—Ordinary (par value R10)........ 600,000

\Share Premium—Ordinary.............................. 150,000

Retained Earnings............................................840,000

Instructions

Prepare the required journal entries for the following unrelated items.

(a) A 5% share dividend is declared and distributed at a time when the market price of the shares is R39 per share.

(b) The par value of the ordinary shares is reduced to R2 with a 5-for-1 share split.

(c) A dividend is declared January 5, 2011, and paid January 25, 2011, in bonds held as an investment. The bonds have a book value of R90,000 and a fair value of R125,000.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...