Problem 4_(20%) Equity Transactions and Statement Preparation 2 pare Chan Inc. has two classes of share capital outstanding: 8%, $20 par Cumulative preference shares and $5 par ordinary shares. No dividends has been declared for the year 2017 and 2018. At December 31, 2018, the following accounts were included in equity. Share Capital - Preference, 150,000 shares, $ 20 $3,000,000 Share Capital - Ordinary, 2,000,000 shares, $ 5 10,000,000 par Share Premium - Preferencer 200,000 Share Premium - Ordinary 27,000,000 Retained earnings (unadjusted for net income 4,500,000 and dividends of + The following transactions affected equity during 2019.- Jan 130,000 preference shares issued at $23 per share. Feb 12 50,000 ordinary shares issued at $20 per share." June 1: 4-for-1 share split (par value reduced to $1.25.) July 1+ 30.000 ordinary treasury shares purchased at $10 per share. Chan uses the cost method. 10,000 treasury shares reissued at $13 per share. 152 Dec The preference dividend is declared, and an ordinary dividend of $0.05 312 per share is declared Dec A 10% share dividends is also declared the market price of the 31+ ordinary share is $35 on Dec. 31( use par value method) Required 1. Prepare the journal entries for the transactions listed above. (14%- 2. Prepare the Equity Section of the Statement of Financial Position in professional format for Chan Inc. at December 31, 2019. Assuming the net income is $1.200,000. (6%) Sept +