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

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

6,000 shares issued and outstandingsh.300,000

Share capitalordinary, sh.10 par value, 60,000 shares authorized,

40,000 shares issued and outstanding400,000

Share premiumordinary110,000

Retained earnings440,000

Total equitysh.1, 250,000

Required

(a)Record the following transactions which occurred consecutively (show all calculations).

1.A total cash dividend of sh.90, 000 was declared and payable to shareholders of record. Record dividends payable on ordinary and preference shares in separate accounts.(5 marks)

2.A 10% ordinary share dividend was declared. The average fair value of the ordinary shares is sh.18 a share.(5 marks)

3.Assume that net income for the year was sh.150, 000 (record the closing entry) and the board of directors appropriated sh.70, 000 of retained earnings for plant expansion.(5 marks)

(b)Construct the equity section incorporating all the above information.

(10 marks)