1.1 Prepare the journal entries to record the transactions of Canada Ltd. (Show all workings.)

1.2 Prepare the equity section as at December 2022.

Answer the question in the space provided below.

Canada Ltd has been authorised to issue 800 000 $50 par value, 10% no-parnon-cumulative preference shares and 2 000 000 no-par ordinary shares. The company assigned a $5.00 stated value to the ordinary shares. On 31 December 2022, the ledger contained the following balances pertaining to equity:

Share capital Preference Share premium Preference Share capital Ordinary Share premium Ordinary Treasury shares Ordinary Share premium Treasury Retained Earnings

300 000 50 000 3 000 000 600 000 10 000 1 000 200 000

Additional information:

The preference shares were issued for land having a fair value of $350 000.

All the ordinary shares were issued for $6.00 cash.

On 1 November, 1 500 ordinary shares that were stated at $5, were purchased for the treasury at a cost of $9 per share.

In December, 600 treasury shares were sold for $11 per share.

No dividends were declared in 2022.