Question 1 (20 Marks)

The Board of Directors of Asiana Bhd proposed to its shareholders at its Annual General Meeting on 31 December 2021 to repurchase 18 million of its issued ordinary shares from the market. The proposal was accepted by the majority of its shareholders. On 1 February 2022, Asiana Bhd repurchased the issued ordinary shares from the market at RM5.20 each. The number of issued and paid-up ordinary share capital was 220,000,000 units, which were issued at RM0.90 each. The retained profits of Asiana Bhd amounted to RM380,000,000 on the purchase date.

Required:

a) Provide requirements for a company to buy back its own shares stipulated in the Bursa Malaysia Listing Requirements and Companies Act 2016.

b) Prepare the journal entries to record the repurchase of shares if its policy is to (i) keep the shares as treasury shares and (ii) cancel all the purchased shares.

c) Assuming that Asiana Bhd adopted treasury shares policy for its share repurchase:

i. Show the entries to record the reissue of 8 million at RM7.20 each on 25 March 2022; and

ii. An extract of Asiana Bhds statement of financial position showing the shareholders equity

part

d) Explain the recognition of redeemable preference shares under the MFRS 132 and Companies

Act 2016

Question 1 (20 Marks) The Board of Directors of Asiana Bhd proposed to its shareholders at its Annual General Meeting on 31 December 2021 to repurchase 18 million of its issued ordinary shares from the market. The proposal was accepted by the majority of its shareholders. On 1 February 2022, Asiana Bhd repurchased the issued ordinary shares from the market at RM5.20 each. The number of issued and paid-up ordinary share capital was 220,000,000 units, which were issued at RM0.90 each. The retained profits of Asiana Bhd amounted to RM380,000,000 on the purchase date. Required: a) Provide requirements for a company to buy back its own shares stipulated in the Bursa Malaysia Listing Requirements and Companies Act 2016. b) Prepare the journal entries to record the repurchase of shares if its policy is to (i) keep the shares as treasury shares and (ii) cancel all the purchased shares. c) Assuming that Asiana Bhd adopted treasury shares policy for its share repurchase: i. Show the entries to record the reissue of 8 million at RM7.20 each on 25 March 2022; and ii. An extract of Asiana Bhd's statement of financial position showing the shareholders' equity part d) Explain the recognition of redeemable preference shares under the MFRS 132 and Companies Act 2016