west Company reported the following balances at December 31, 2016 ordinary share $500,000, share premium-ordinary $100,000, and retained earnings $250,000. During 2017, the following transactions affected shareholders 'equity 1. Issued preference shares with a par value of $125,000 for $200,000. 2. Purchased treasury shares (ordinary ) for $40,000. 3. Earned net income of $180,000. 4. Declared and paid cash dividends of $56,000. Instruction -prepare journal entries & closing entries for above transaction -Prepare the shareholders' equity section of west Company's December 31, 2017, balance sheet

west Company reported the following balances at December 31, 2016 ordinary share $500,000, share premium-ordinary $100,000, and retained earnings $250,000. During 2017, the following transactions affected shareholders 'equity 1. Issued preference shares with a par value of $125,000 for $200,000. 2. Purchased treasury shares (ordinary ) for $40,000. 3. Earned net income of $180,000. 4. Declared and paid cash dividends of $56,000. Instruction -prepare journal entries & closing entries for above transaction -Prepare the shareholders' equity section of west Company's December 31, 2017, balance sheet

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

west Company reported the following balances at December 31, 2016
ordinary share $500,000, share premium-ordinary $100,000, and
retained earnings $250,000. During 2017, the following transactions
affected shareholders 'equity
1. Issued preference shares with a par value of $125,000 for $200,000.
2. Purchased treasury shares (ordinary ) for $40,000.
3. Earned net income of $180,000.
4. Declared and paid cash dividends of $56,000.
Instruction
-prepare journal entries & closing entries for above
transaction
-Prepare the shareholders' equity section of west Company's
December 31, 2017, balance sheet
Q2) On Jan. 1, 2017 Ahmad Purchased 50 Bonds
for $1,000 each ,10% from XYZ Company bonds for
$50,000. Interest is payable annually on January.
Dec. 31, 2017 Accrued interest on XYZ bonds.
Jan. 1, 2018 Received interest from XYZ bonds.
Jan 1,2018 sold bonds for $ 29,000
Instruction
(a) Journalize the transactions in ahmad
books
(b) prepare the adjusting entry for the accrual of
interest on December 31, 2017

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