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problem 1 (Retirement, Conversion and Treasury Shares) The shareholders equity of Adana Publishing Company shows...

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Accounting

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.

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