Question 2

During 2019, the following transactions occurred in Rock Mountain Limited:

On 2 August, the Company has repurchased 128,000 treasury shares at a price of $ 10

On 5 August, 32,000 shares of the above mentioned has been sold again reissued at a price of $ 12.

On 9 September, another 8,000 shares of the above mentioned treasury shares was sold at price of $ 9.

On 20 Septermber, another 40,000 shares of the treasury shares was sold at price of $ 8.

Required

(1) Prepare Journal enrties to record the above mentioned transsaction [16 marks]

(2) Prepare the equity section as of December 31, 2019 (4 marks)

Equity section as of 1^st January 2019

Share capital ordinary, $1 par, 900,000 shares $ 900,000

Share premuim ordinary $ 400,000

Retained Earnings $ 500,000

Total Equity $ 1,800,000

(3) State some of the special characteristics of the Corporate form of an organization (5 marks)