ACC 154 – ASSIGNMENT 1

SUGGESTED SOLUTIONS

PROBLEM 1
Transaction Journal Entries Debit Credit
A Treasury Shares 1,650,000
Cash 1,650,000

B Cash 1,260,000
Treasury Shares 990,000
Share Premium - TS 270,000

C Retained Earnings 1,740,000

Dividends Payable 1,740,000

D MEMO ENTRY

E Cash 7,200,000
Share Capital 6,000,000
Share Premium - OS 1,200,000

F MEMO ENTRY

G Equipment 780,000
Share Capital 600,000
Share Premium 180,000

H Income Summary 1,440,000

Retained Earnings 1,440,000

POSTINGS

Transaction # Share Capital Share Premium - OS Share Premium - TS Treasury Shares Retained Earnings
18,000,000 1,500,000 5,400,000
A 1,650,000
B 270,000 -990,000
C -1,740,000
E 6,000,000 1,200,000
G 600,000 180,000
H 1,440,000
TOTAL 24,600,000 2,880,000 270,000 660,000 5,100,000
Requirement
1 Share Capital 24,600,000
2 Share Premium
Share Premium - OS 2,880,000
Share Premium - TS 270,000
TOTAL 3,150,000
4 Unappropriated RE
Retained Earnings 5,100,000
3 Treasury Shares -660,000
TOTAL 4,440,000

PROBLEM 2
Transaction Journal Entries Debit Credit
A Land 600,000
Discount on Preference Share 120,000
Preference Shares 720,000

B Cash 675,000
Ordinary Shares 270,000
Share Premium - OS 405,000

C Treasury Shares 729,000

Cash 729,000

D Cash 1,170,000
Subscription Receivable 330,000
Subscribed Ordinary Shares 600,000
Share Premium - OS 900,000

E Preference Shares 360,000

Retained Earnings 72,000
Cash 432,000

F Retained Earnings 144,000

Cash 144,000

G Retained Earnings 990,000

Cash 990,000

H Income Summary 1,500,000

Retained Earnings 1,500,000
 Share Premium -
Subscribed Shares - OS Subscription Receivable
Transaction # Ordinary Shares Preference Shares Share Premium - OS PS Treasury Shares Discount in Preference Share Retained Earnings
6,600,000 360,000 3,732,000
A 720,000 120,000
B 270,000 405,000
C 729,000
D 600,000 330,000 900,000
E -360,000 -72,000
F -144,000
G -990,000
H 1,500,000
TOTAL 6,870,000 720,000 600,000 330,000 1,305,000 0 729,000 120,000 4,026,000

Requirement
1 Preference Share 720,000
2 Ordinary Share 6,870,000
3 Share Premium
Share Premium - OS 1,305,000
Share Premium - PS 0
Share Premium - TS 0
TOTAL 1,305,000
4 Retained Earnings 4,026,000
5 TOTAL SHE
Ordinary Shares 6,870,000
Preference Shares 720,000
Subscribed Share - OS 600,000
Subscription
Receivable 0
Share Premium 1,305,000
Discount on PS -120,000
Treasury Shares -729,000
Retained Earnings 4,026,000
TOTAL 12,672,000
 PROBLEM 3
Transaction Journal Entries Debit Credit
Feb-10 Cash 5,000,000
Ordinary Share 400,000
Share Premium - OS 4,600,000

Mar-15 Retained Earnings 360,000

Dividends Payable 360,000

Apr-15 Dividends Payable 360,000

Cash 360,000

Aug-30 Ordinary Shares 100,000

Share Premium - OS 1,000,000
Retained Earnings 200,000
Cash 1,300,000

Dec-15 Retained Earnings 340,000

Dividends Payable 340,000

Reconstruction of the Treasury Share Transaction

2022
Mar-31 Treasury Shares (50,000 * 2) 100,000
Share Premium - excess over par [50,000 * (22-2)] 1,000,000
Share Premium - TS 200,000
Cash (balancing figure) 900,000

Total Issued Share as of Dec 31, 2022 750,000

Total Outstanding Share as of Dec 31, 2022 700,000
Treasury Shares 50,000

Requirement
1 4,600,000 (see Feb 15 Journal Entry)
2 1,000,000 (see Aug 30 Journal Entry)
(Reasonably Possible is
3 600,000 disclosed)
4 700,000 (360,000 + 340,000)
5 900,000