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    MC 9 Equity A201 Student

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    Kkk.sss
    This document provides guidelines for submitting answers to a mini case on equity for a financial accounting course. It includes 3 questions related to recording share transactions and dividends, preparing a statement of changes in equity, and discussing alternative methods for providing returns to shareholders such as share buybacks. Students are instructed to provide individual handwritten answers, scan them into a PDF, and submit the file online by the deadline.

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    MC 9 Equity A201 Student

    Uploaded by

    Kkk.sss
    91 views4 pages
    This document provides guidelines for submitting answers to a mini case on equity for a financial accounting course. It includes 3 questions related to recording share transactions and dividends, preparing a statement of changes in equity, and discussing alternative methods for providing returns to shareholders such as share buybacks. Students are instructed to provide individual handwritten answers, scan them into a PDF, and submit the file online by the deadline.

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    This document provides guidelines for submitting answers to a mini case on equity for a financial accounting course. It includes 3 questions related to recording share transactions and dividends, preparing a statement of changes in equity, and discussing alternative methods for providing returns to shareholders such as share buybacks. Students are instructed to provide individual handwritten answers, scan them into a PDF, and submit the file online by the deadline.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    91 views4 pages

    MC 9 Equity A201 Student

    Uploaded by

    Kkk.sss
    This document provides guidelines for submitting answers to a mini case on equity for a financial accounting course. It includes 3 questions related to recording share transactions and dividends, preparing a statement of changes in equity, and discussing alternative methods for providing returns to shareholders such as share buybacks. Students are instructed to provide individual handwritten answers, scan them into a PDF, and submit the file online by the deadline.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    BKAR1013 FINANCIAL ACCOUNTING AND REPORTING I (A201)

    MINI CASE 9
    EQUITY

    DUE DATE: 14/1/2021

    Guidelines for submission:

    1) Please answer all questions.

    2) Please write your name, matric number, group on the header and page number on the
    bottom of your answer document.

    3) The mini case is an individual task, however discussion is allowed, but copying other
    student’s answer is forbidden.

    4) Your answer should be handwritten and subsequently scanned with a scanner or


    mobile scanner apps in a combined PDF file. The scanned document must be clear,
    easily readable and complete. Photo is not allowed.

    5) Submit your scanned answer via Online Learning portal → within


    the allotted time and period, before 12.00 mid night, (MYT). Only one submission will
    be accepted.

    1
    QUESTION 1
    TTG Bhd had the following transactions pertaining to its ordinary shares during the first year
    of operations.

    1 Jan Issued 80,000 shares for cash at RM6 per share.


    1 Mar Issued 5,000 shares to lawyer in payment of a bill for RM40,000 for services
    rendered in helping the company to incorporate.
    1 July Issued 30,000 shares for cash at RM8 per share.
    1 Sep Issued 60,000 shares for cash at RM10 per share.

    REQUIRED:
    Prepare the journal entries to record the transactions.

    QUESTION 2
    Savonn Bhd has outstanding 3,000,000 ordinary shares. The balanced in its contributed share
    capital and retained earnings accounts at 1 January 2019 were RM60,000,000 and
    RM24,000,000, respectively. During 2019, the company’s net income was RM4,700,000. A
    cash dividend of RM0.60 per share was declared on 5 May 2019, and was paid on 30 June
    2019. A 6% share dividend was declared on 30 November 2019, and distributed to
    shareholders of record on 31 December 2019. The market price of the shares has been as
    follows:
    31 October 2019 RM31
    30 November 2019 RM34
    31 December 2019 RM38

    REQUIRED:
    (a) Prepare the journal entries to record the declaration and payment of the cash dividend
    and the share dividend.
    (b) Prepare the Statement of Changes in Equity for the year ended 31 December 2019.

    2
    QUESTION 3

    Macpie Prima Bhd. (MPB) was formed on 1 July 2000. The following data were taken from
    the Statement of Financial Position of MPB on 30 June 2018.
    RM
    Share capital – Ordinary 150,000,000 shares outstanding 277,500,000
    Retained earnings 98,523,150
    Fair value reserve 255,000

    During the financial year 2019, the following transactions took place:

    1. 120,000 ordinary shares were issued for cash on 15 August 2018 at RM2.30 per share.
    Transaction costs incurred were as follows:
    i) Legal fees RM10,500
    ii) Underwriters fees RM 8,200

    2. MPB has followed a schedule of declaring cash dividends in December and June with
    payment being made to shareholders of record in the following month. The cash dividends
    declared since 2018 were shown below:

    Declaration Date Dividend


    15 June 2018 3 sen per share
    15 December 2018 2 sen per share
    15 June 2019 -

    No cash dividends were declared during June 2019 due to the company’s liquidity
    problem.

    3. During the financial year 2019, fair value reserve decreased by RM47,000 due to the
    weaker stock market performance.

    4. Profit for the financial year 2019 was RM6,523,000.

    REQUIRED:

    (a) Prepare journal entries to record the issuance of shares and dividend payments in the
    financial year 2019.

    (b) Prepare the Statement of Changes in Equity for MPB for the year ended 30 June 2019
    in accordance with the requirements of MFRS 101 Presentation of Financial
    Statements.

    (c) The directors of MPB decided not to declare the cash dividends in June 2019 due to
    the liquidity problem. Suggest to the directors of MPB an alternative method to
    provide returns to the shareholders.
    (d) Share retirement method and treasury share method are two alternative methods of
    accounting for share buybacks allowed under the Malaysian Companies Act 2016.

    3
    Briefly explain the accounting treatment for share buybacks under treasury share
    method.

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