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Instructions X Holland Incorporated's records provide the following information on January 1, 2019: Preferred stock, $50 par (5,000 shares authorized, issued, and outstanding) $250,000 Common stock, $10 par (20,000 shares authorized, 10,000 shares issued and outstanding) 100,000 Additional paid-in capital on preferred stock 50,000 Additional paid-in capital on common stock 80,000 Retained earnings 100,000 During 2019, the following transactions were recorded by Holland: 1. Reacquired 250 shares of preferred stock for $53 per share. 2. Reacquired 500 shares of common stock for $20 per share. 3. Sold 200 shares of the common stock acquired in Transaction 2 for $27 per share. 4. Sold 250 shares of preferred stock acquired in Transaction 1 for $59 per share. 5. Sold 100 shares of the common stock acquired in Transaction 2 for $18 per share. Required: 1. Prepare journal entries to record the stock transactions of Holland assuming it uses the cost method of accounting for treasury stock. 2. Prepare the shareholders' equity section of the Holland balance sheet at December 31, 2019, assuming 2019 net income was $40,000 and dividends distributed were $20,000. 3. Next Level Assume that Holland is using IFRS. At the end of 2019, Holland revalued its property, plant, and equipment upward by $50,000. Discuss how Holland's shareholders' equity items would be different under IFRS, and then, based on your answer, repeat Requirement 2.X Chart of Accounts 111 Cash 411 Sales Revenue 121 Accounts Receivable 141 Inventory EXPENSES 152 Prepaid Insurance 500 Cost of Goods Sold 181 Equipment 511 Insurance Expense 198 Accumulated Depreciation 512 Utilities Expense 521 Salaries Expense LIABILITIES 532 Bad Debt Expense 211 Accounts Payable 540 Interest Expense 231 Salaries Payable 541 Depreciation Expense 250 Unearned Revenue 559 Miscellaneous Expenses 261 Income Taxes Payable 910 Income Tax Expense EQUITY 305 Preferred Stock 311 Common Stock 318 Additional Paid-in Capital on Preferred Stock 320 Additional Paid-in Capital on Common Stock 321 Additional Paid-in Capital from Treasury Stock 331 Retained Earnings 336 Treasury Stock: Preferred 337 Treasury Stock: CommonX Amount Descriptions Amount Descriptions Accumulated profits and losses Revaluation surplus Total contributed capital Total contributed capital and retained earnings Total shareholders' equity Treasury stockNext Level X 3a. Assume that Holland is using IFRS. At the end of 2019, Holland revalued its property, plant, and equipment upward by $50,000. Prepare the shareholders' equity section of the Holland balance sheet at December 31, 2019 using IFRS. Additional Instructions HOLLAND INCORPORATED Shareholders' Equity December 31, 2019 1 Contributed Capital: 2 11 123b. Holland Incorporated uses IFRS. At the end of 2019, Holland revalued its property, plant, and equipment upward by $50,000. Which of the following is correct regarding Holland's shareholders' equity items? I. Holland will report the account Retained Earnings. I. Holland will report revaluation surplus of $50,000. Ill. Holland's total shareholders' equity is the same amount it would be under U.S. GAAP. II only Il and Ill only I and Ill only I, II and IIIBalance Sheet X 2. Prepare the shareholders' equity section of the Holland balance sheet at December 31, 2019, assuming 2019 net income was $40,000 and dividends distributed were $20,000. Balance Sheet Instructions HOLLAND INCORPORATED Shareholders' Equity December 31, 2019 1 Contributed Capital: 2 o co 10 11General Journal X 1. Prepare journal entries to record the stock transactions of Holland assuming it uses the cost method of accounting for treasury stock on December 31, 2019. General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT N unT co 10 11 12 13
