Franklin, Inc. had the following shareholders’ equity on November 30:

Shareholders’ Equity

Share Capital:

Common Shares, unlimited number of shares authorized,

50,000 shares issued and 45,000 shares outstanding......$400,000

Contributed Surplus (purchase of treasury shares, June 30)... 10,000

Retained Earnings.................. 520,000

Less: 5,000 Treasury Shares................ (40,000)

Total Shareholders’ Equity................$890,000

On December 30, Franklin, Inc. purchased another 8,000 treasury shares at $10 per share.

Requirement

1. What is the average price per common share? What is the amount paid to purchase treasury shares on June 30?

2. Journalize the purchases of the treasury shares on June 30 and December 30.

3. Prepare the shareholders’ equity section of the balance sheet at December 31.