Page 66 - Ebook Financial Accounting 3
P. 66
EXERCISE
QUESTION 3.1
The following is the financial statement of Awana Bhd.:
Awana Bhd.
Statement of Financial Position as at 31 December 2020
RM
Non-current assets 100,000
Current assets 50,000
Bank 80,000
230,000
Issued and fully paid-up capital
100,000 ordinary shares of RM1 each 100,000
60,000 9% Redeemable preference shares of RM1 each 60,000
Retained earnings 70,000
230,000
Additional information:
i) The company directors resolved to redeem all the redeemable preference shares at a
premium on 31 December 2020.
ii) A fresh issue of 60,000 ordinary shares of RM1 each were issued for the purpose of
redeeming the preference shares. All the new shares were fully paid up.
You are required to prepare:
a) The journal entries to record the above transactions.
b) Statement of Financial Position immediately after the redemption.
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