Question 3 (Statement of shareholders’ equity): Below is the statement of shareholder’s equity of HKU Ltd.: The following transactions happen during 20X2: (a) Issuance of ordinary shares - 800 shares @ $23 per share (b) Repurchase 600 shares of preference share at $45 per share, out of share capital (c) Issue 4 bonus ordinary shares for each 10 ordinary shares. The company has decided to capitalize 1/5 of its beginning balance of the retained profits for this bonus share issuance. (d) Net income is $70,000 for the year. Prepare the statement of shareholders’ equity for year 20X2.
Question 3 (Statement of shareholders’ equity): Below is the statement of shareholder’s equity of HKU Ltd.: The following transactions happen during 20X2: (a) Issuance of ordinary shares - 800 shares @ $23 per share (b) Repurchase 600 shares of preference share at $45 per share, out of share capital (c) Issue 4 bonus ordinary shares for each 10 ordinary shares. The company has decided to capitalize 1/5 of its beginning balance of the retained profits for this bonus share issuance. (d) Net income is $70,000 for the year. Prepare the statement of shareholders’ equity for year 20X2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 3 (Statement of shareholders’ equity): Below is the statement of shareholder’s equity of HKU Ltd.:
The following transactions happen during 20X2:
(a) Issuance of ordinary shares - 800 shares @ $23 per share
(b) Repurchase 600 shares of preference share at $45 per share, out of share capital
(c) Issue 4 bonus ordinary shares for each 10 ordinary shares. The company has decided to capitalize 1/5 of its beginning balance of the retained profits for this bonus share issuance.
(d) Net income is $70,000 for the year.
Prepare the statement of shareholders’ equity for year 20X2.
Transcribed Image Text:December 31, 20X1
Shareholders' equity
Preference share capital (3,000 shares)
$90,000
Ordinary share capital (6,000 shares)
120,000
Retained profits
350,000
Total shareholders’ equity
560,000
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