Chapter 6
Corporations: Contributed Capital and Dividends
288
AP-21A (
11
)
The beginning balances of Adcha Corporation’s shareholders’ equity accounts for the fiscal
year ending September 30, 2017 are as follows.
Common shares (unlimited number of shares authorized, 50,000 shares issued)
$150,000
Contributed surplus
7,000
Retained earnings
100,000
The following are the only transactions related to shareholders’ equity that happened
between September 30, 2016 and September 30, 2017.
On October 15, 2016, Adcha received $42,500 from issuing 5,000 common shares.
On May 30, 2017, Adcha paid $40,000 to repurchase 10,000 common shares.
Required
a) Record the share reacquisition journal entry on May 30, 2017.
Date
Account Title and Explanation
Debit
Credit
b) Fill in the number of shares issued (or outstanding) and the balances for all shareholders’
equity accounts in the partial balance sheet on May 30, 2017 after the purchase of the
shares.
Adcha Corporation
Balance Sheet (partial)
May 30, 2017
Shareholders' equity
Common shares (unlimited number of shares authorized,
shares issued)
Contributed surplus
Retained earnings
Total shareholders' equity
