Question 1 On 1 January 2017, Fanny and several friends organized a corporation called Markup Limited. The corporation was authorized to issue 100,000 of $100 par value, 5% cumulative preference shares and 100,000 ordinary shares of $1 par value. The following transactions occurred during the year: 7 Jan 18 Jan 25 Nov Issued for cash 30,000 ordinary shares at $10 per share. The shares were issued to Fanny and four other investors. Issued 4,000 preference shares for cash of $500,000 Last year Markup did not declare any dividend. In 2017 the board of directors declared to pay $0.1 for each ordinary share. All dividends will be paid out in January 2018. Required: Prepare journal entries to record the above transactions. No explanation is required. Question 2 Purity Corporation is a company formed for selling water filters. It was authorized to issue 40,000 ordinary share of $5 par value. Half of the shares were issued at the price of $7 per share. The Company had retained earnings of $100,400 as at 1 January 2014 and the profit of $82,045 for the year. On 31 December 2014, the company declared a cash dividend of $0.5 per share on the outstanding shares that were held by the shareholders. Required: Prepare the shareholders' equity section of the Statement of Financial Position for Purity Corporation as at 31 December 2014