Reference no: EM132791437
Russell Inc. follows IFRS. Its December 31, 2019 trial balance includes the following balances:
Preferred shares, $1, cumulative (11,000 shares issued) $300,000
Common shares (20,000 shares issued) $540,000
Contributed surplus - common share repurchase $ 6,000
Retained earnings $ 80,000
Accumulated other comprehensive loss ($22,000)
The preferred dividends have been declared and paid up to and including 2017.
Required:
Problem a) Prepare journal entries for Russell Inc. resulting from the following transactions (show all calculations):
i) January 1, 2020: Repurchased 3000 common shares for $31 per share and cancelled them.
ii) December 29, 2020: Declared and paid all preferred dividends that are outstanding.
iii) December 30, 2020: Declared a 15% common stock dividend to be issued in January. The common shares were trading at $30 per share.
Problem b) Prepare statement of changes in shareholders' equity in good form for Russell Inc. at December 31, 2020 including the number of shares outstanding.
- Russell Inc. had net income of $198,000 and other comprehensive income of $24,000 (unrealized gains on investments) during 2020.
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