Reference no: EM132808094

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 the statement of changes in shareholders' equity in good form for Russell Inc. at December 31, 2020 including the number of shares outstanding.