12 X 3 marks = 6 marks 11. Zaata Ltd decided to repurchase 500,000 of its ordinary shares under a buy- back scheme for $5.70 per share. At the date of the buy-back, the equity of the company consisted of: Share capital (6,000,000 shares fully paid) $ 12,000,000 General reserve 1,360,000 Retained earnings 2,460,000 The costs of the buy-back scheme amounted to $7,600. Instructions: A. Prepare the journal entries to account for the buy-back, assuming: (1) that the original amount of the shares is eliminated from Share Capital, and then any remaining buy-back price adjusted equally against the General Reserve and Retained Earnings accounts. that the buy-back is not adjusted against share capital, but is adjusted firstly against the General Reserve account, then any remaining against the Retained Earnings account. B. Assume now that the buy-back price per share was equal to $2.40 and that the company had no General Reserve account, and retained earnings of only $1,040,000. Further, assume that the company accounts for share buy-backs against retained earnings first. Prepare journal entries to record the share buy-back