Meranti Majų Bhd has the following equity balances at 31 December 2019. RM'000 Share Capital – Ordinary, 22,000,000 shares outstanding Retained Earnings Exchange Translation Reserve 47,300 283,800 5,350 During 2020, the following transactions occurred: Date Transactions 20 March Issued 1 million shares at a price of RM2.20 per share. The transaction cost related to the issuance of shares was RM0.15 per share. 30 September Declared a 2% share dividend to existing shareholders. The share dividend was distributed on the same date. The market price of share was RM2.40. 31 December Declared a cash dividend of RM0.50 per share on outstanding shares. Additional information: 1. 2. Profit for the year 2020 was RM12,000,000. Exchange translation loss recognized đuribg the year 2020 was RM70,000. Required: (Round all figures to TWO (2) decimal points) (a) Prepare jourmal entries to record the above transactions. (b) Prepare the Statement of Changes in Equity for Meranti Majų Bhd for the year ended 31 December 2020 in accordance with the requirements of MFRS 101 Presentation of Financial Statements. (c) The board of directors of Meranti Majy Bhd has decided to repurchase the issued shares. The company has surplus cash and intends to distribute to shareholders. The repurchased shares will not be reissued in the future. Propose and briefly explain the appropriate accounting method to record the share repurchase.
Meranti Majų Bhd has the following equity balances at 31 December 2019. RM'000 Share Capital – Ordinary, 22,000,000 shares outstanding Retained Earnings Exchange Translation Reserve 47,300 283,800 5,350 During 2020, the following transactions occurred: Date Transactions 20 March Issued 1 million shares at a price of RM2.20 per share. The transaction cost related to the issuance of shares was RM0.15 per share. 30 September Declared a 2% share dividend to existing shareholders. The share dividend was distributed on the same date. The market price of share was RM2.40. 31 December Declared a cash dividend of RM0.50 per share on outstanding shares. Additional information: 1. 2. Profit for the year 2020 was RM12,000,000. Exchange translation loss recognized đuribg the year 2020 was RM70,000. Required: (Round all figures to TWO (2) decimal points) (a) Prepare jourmal entries to record the above transactions. (b) Prepare the Statement of Changes in Equity for Meranti Majų Bhd for the year ended 31 December 2020 in accordance with the requirements of MFRS 101 Presentation of Financial Statements. (c) The board of directors of Meranti Majy Bhd has decided to repurchase the issued shares. The company has surplus cash and intends to distribute to shareholders. The repurchased shares will not be reissued in the future. Propose and briefly explain the appropriate accounting method to record the share repurchase.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:QUESTION 1
Meranti Majų Bhd has the following equity balances at 31 December 2019.
RM'000
Share Capital – Ordinary, 22,000,000 shares outstanding
Retained Earnings
Exchange Translation Reserve
47,300
283,800
5,350
During 2020, the following transactions occurred:
Date
Transactions
Issued 1 million shares at a price of RM2.20 per share. The transaction
cost related to the issuance of shares was RM0.15 per share.
20 March
30 September
Declared a 2% share dividend to existing shareholders. The share
dividend was distributed on the same date. The market price of share was
RM2.40.
31 December
Declared a cash dividend of RM0.50 per share on outstanding shares.
Additional information:
1.
Profit for the year 2020 was RM12,000,000.
Exchange translation loss recognized durihg the year 2020 was RM70,000.
2.
Required:
(Round all figures to TWO (2) decimal points)
(a)
Prepare journal entries to record the above transactions.
(b)
Prepare the Statement of Changes in Equity for Meranti Majų Bhd for the year ended 31
December 2020 in accordance with the requirements of MFRS 101 Presentation of
Financial Statements.
(c)
The board of directors of Meranti Majų Bhd has decided to repurchase the issued shares.
The company has surplus cash and intends to distribute to shareholders. The repurchased shares
will not be reissued in the future. Propose and briefly explain the appropriate accounting method
to record the share repurchase.
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