Question
On 1/2/2016, Al-Mawadda Company obtained approval from the Securities Commission, granting it the right to issue 4000 preferred shares with a nominal value of 100
On 1/2/2016, Al-Mawadda Company obtained approval from the Securities Commission, granting it the right to issue 4000 preferred shares with a nominal value of 100 dinars (6% combined for non-participating profits), in addition to issuing 40,000 ordinary shares with a nominal value of 10 dinars. During the current year and the following year (2016, 2017) it carried out the following transactions: 2. On 5/1/2016, 25,000 ordinary shares were issued for trading at a price of 15 dinars per share. 3. On 1/2/2016, it issued 2,500 preferred shares to Al-Tawfeek Company in exchange for acquiring (purchasing) the following assets: Equipment with a fair value of 60,000 dinars, buildings with a fair value of 140,000 dinars and lands valued at 125,000 dinars. 4. On 1/7/2016 it bought 2000 shares of its common stock at a price of 15 dinars per share (use the cost method). 5. On 5/8/2016 it sold 2000 treasury shares at a price of 25 dinars per share. 6. On 31/12/2016, dividends were announced for preferred shares, as well as cash dividends amounting to 0.25 dinars per share of ordinary shares. 7. On December 31, 2016, it concluded its business and an income summary was prepared, and the net income represented 135,000 dinars. 8. On 1/2/2017 the company issued 8000 ordinary shares, 150 preferred shares, and they were sold in one transaction, with a value of 150,000 dinars. Note that the market value of ordinary shares at that date amounted to 18 dinars and for preferred shares amounted to 190 dinars.
Required: 1. Recording the daily entries for the operations that took place in the affection company. 2. Preparing the equity side of the balance sheet for Al Mawaddah Company. 3. Preparing the daily entries for the above operations that took place in Al-Mawaddah Company.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started