Farah Corporation has the following capital structure at the beginning of the year:

Share capitalpreference 6%, $50 par value, 20,000 shares authorized,

6,000 shares issued and outstanding $ 300,000

Share capitalordinary, $10 par value, 60,000 shares authorized,

40,000 shares issued and outstanding 400,000

Share premiumordinary 110,000

Retained earnings 440,000

Instructions

Record the following transactions which occurred consecutively.

1. A cash dividend was declared and after a month paid to preference shareholders of record.

2. A $30,000 cash dividend was declared and paid after a month to ordinary shareholders of record.

3. A 8% ordinary share dividend was declare and issued after a month.

4. Purchased 1,200 ordinary shares of to be held as treasury shares, paying $22 per share.

5. Sold 600 of the treasury shares at $27 per share.

6. Sold the remaining treasury shares at $17 per share.