Journal Entries

Date Particulars Debit Credit

2006
Jan. 26 Treasury Shares 550,000
Cash 550,000
To record reacquisition of treasury shares for cash

April 04 Cash 420,000

Treasury Shares 330,000
Share Premium - Treasury Shares 90,000
To record issuance of treasury shares above par value

July 01 Retained Earnings 1,220,000

Cash Dividends Payable 1,220,000
To record dividends payable at date of declaration

05 Cash Dividends Payable 1,220,000

Cash 1,220,000
To record payment of dividends declared

Nov. 01 No entry

Dec. 05 Equipment 260,000

Share Premium - Ordinary Shares 140,000
Ordinary Shares 400,000
To record issuance of ordinary shares in
exchange for equipment

31 Income Summary 1,730,000

Retained Earnings 1,730,000
To close income summary to retained earnings
 31 Retained Earnings
Cash Dividends
To close cash dividends to retained earnings

Valdez Corporation
Statement of Changes in Shareholders’ Equity
For the Year Ended December 31, 2006

Contributed Capital
Share Capital
Ordinary shares, P100 par value,
64,000 shares issued and
outstanding 6,400,000

Additional Paid-in Capital

Share Premium - Ordinary Shares 360,000
Share Premium - Treasury Share 90,000 450,000
Total Contributed Capital 6,850,000

Retained Earnings, Jan. 01, 2006 1,800,000

Add: Net Income 1,730,000
Less: Cash Dividends (1,220,000)
Retained Earnings, Dec. 31, 2006 2,310,000
Less: Treasury shares, 2,000 shares at cost (220,000)
Total Shareholders’ Equity 8,940,000