TUGAS 1 AKM2: CH 15 EQUITY-SHARE CAPITAL

Lucia Ari Diyani, Dra., Ak., MM., M.Ak., CA.

Ex. 1 Lump sum issuance of shares.

Parker Corporation has issued 2,000 ordinary shares and 400 preference shares for a lump sum
of $72,000 cash.

Instructions
(a) Give the entry for the issuance assuming the par value of the ordinary shares was $5 and the
fair value $30, and the par value of the preference shares was $40 and the fair value $50.
(Each valuation is on a per share basis and there are ready markets for each class of shares.)

(b) Give the entry for the issuance assuming the same facts as (a) above except the preference
shares have no ready market and the ordinary shares have a fair value of $25 per share.

Ex. 2 Treasury shares.

Agler Corporation’s statement of financial position reported the following:
Share capital—ordinary outstanding, 5,000 shares, par $30 per share $150,000
share premium—ordinary 80,000
Retained earnings 100,000

The following transactions occurred this year:

(a) Purchased 120 ordinary shares of to be held as treasury shares, paying $60 per share.
(b) Sold 90 of the treasury shares at $65 per share.
(c) Sold the remaining treasury shares at $50 per share.

Instructions
Prepare the journal entry for these transactions under the cost method of accounting for treasury
shares.

EX. 3 Equity transactions.

Presented below is information related to Wyrick Company:
1. The company is granted a charter that authorizes issuance of 15,000 shares of $100 par
value preference shares and 40,000 shares of no-par ordinary shares.
2. 8,000 ordinary shares are issued to the founders of the corporation for land valued by the
board of directors at $300,000. The board establishes a stated value of $5 a share for the
ordinary shares.
3. 5,000 preference shares are sold for cash at $120 per share.
4. The company issues 100 ordinary shares to its attorneys for costs associated with starting the
company. At that time, the ordinary shares were selling at $60 per share.

Instructions
Prepare the general journal entries necessary to record these transactions.

Lc.