ml E15-18 (Dividends and EquitY Section) Elizabeth Company reported

equity section of its December 31, 2010, statement of financial

position'
amounts in the

Share capital-preference, 8%, $100 par (10,000 shares

authorized, 2,000 shares issued) $200,000
Share capital-ordinary, $5 par {100,000 shares authorized'
100,000
20,000 shares issued)
125,000
Share premium
450,000
Retained earnings
Total $875,000

During 2017,E\izabeth took part in the following transactions concerning equity.

l. paid the annual 2010 58 per share dividend on preference shares and a $2 per share dividend on
ordinary shares. These dividends had been declared on December 37,2010.
2. purchased 2,700 shares of its own outstanding ordinary shares {or $40 per share. Elizabeth uses
the cost method.
3. Reissued 700 treasury shares for land vaiued at $30,000'
4. Issued 500 pre{erence shares at $105 per share'
5. Declared a 10% share dividend on the outstanding ordinary shares when the shares are selling for
$45 per share.
6. Issued the share dividend.
j. Declared the alnual 2011 $8 per share dividend on preference shares and the $2 per share divi-
dend on ordinary shares. These dividends are payable in201'2'
j'rri; r.;r ii:i;i:"'
(a) Prepare journal entries to record the transactions described above.
(b) prepare ihe December 37,2011, equity section. Assume 2011 net income was $330,000.