1. Journalise the transactions in both years 2015 and 2016

2. Prepare an extract of the statement of financial position showing the equity and liability sections at 31 December 2016

QUESTION 3 (TOTAL: 10 marks) Green Wave Berhad has the following equity accounts at 31 December 2014 Ordinary Share Capital, no par value Authorised 1,000,000 shares Issued: 480,000 shares RM480,000 9% Cumulative Preference Share Capital, no par value Authorised: 200.000 shares Issued Nil Retained carnings RM394,000 Additional information: Transactions in 2015 and 2016 are as follows. 2015 January The company issued 150,000 Ordinary Shares for cash of RM2 cach to the public January The company issued 6,300 9% Cumulative Preference Shares for cash of RM10 per share July Issued a 5-year 7% bond with par value of RM200,000, The market rate when the bonds were issued was 6,5%. The company received RM204,212 cash for the bonds December The company issued no-par bonus shares at RM2 per share, at a ratio of one for every 7 shares held. The company used its retained camings for the purpose of giving bonus share. December No preference dividends were paid in 2015. December Earned profit of RM76,000 during 2015 and this amount is transferred to Retained Eamines 2016 April Obtained a 4-month loan amounting RM15,000 from TriCity Bank at 6% per year. The funds will be used to purchase new inventory. May Sales revenue of RM850,000 were covered by Green Wave's service warranty. At 31 December 2015. Provision for Warranty Expense account was RM11,600. During the year, Green Wave estimated warranty expense of RM34.000 and paid warranty claims of RM34.800 in May 2016 August The company paid the bank loan: principal amount and interest December Eamed profit of RM194,000 during 2016 and this amount is transferred to Retained Earings December Declared cash dividend of RM0.20 per share to ordinary shareholders, payable in January 2017 December Declared and paid the 2015 preference dividend in arrears and the 2016 dividend on preference shares