The shareholders equity section of the statement of financial position of ABC Ltd included the following accounts at December 31, 2020: Shareholders Equity ($ in millions) Issued Capital: Ordinary share capital, 120 million shares at $1 par $120 Ordinary share premium 816 Retained Earnings 2,880 Total shareholders equity $3,816

Required:

1. During 2021, several transactions affected the shares of ABC. Prepare the journal entries for these events.

a). On March 1, ABC issued 20 million of its 8% preference shares, $1 par per share, for $22 per share.

b). On September 1, 1 million ordinary shares, $1 par per share, were issued in exchange for four equipment. Each equipment had a fair value of $0.25 million.

c). During the month of October, ABC involved the following transactions regarding to share repurchase and resold: 1) October 2, ABC reacquired 2 million ordinary shares at $10 per share as retirement purpose. 2) October 5, ABC repurchased 5 million ordinary shares at $10 per share as treasury share. 3) ABC sold 1 million shares at $12 per share. 4) One date later, ABC sold another 1 million shares at $7 per share.

d). On November 15, 1 million of the ordinary shares and 5 million preference shares were sold for $40 million. The preference shares had not traded since March and their market value was not sure.

e). On December 1, the board of directors declared a cash dividend of $1 per share on its all outstanding ordinary shares, payable on December 23 to shareholders of record on December 10. In addition, the board also declare the 8% cash dividend on the outstanding preference shares, payable on December 23 to shareholders of record on December 10.

f). On December 15, a 1-for-2 bonus issue was declared and distributed to ordinary shareholders when the fair value of the $1 par ordinary shares was $10 per shares. Assume that the corporation law requires a reclassification from retained earnings to issued capital of an amount equal to the par value of the additional shares distributed.

2. Prepare the shareholders equity section of the comparative statements of financial position for ABC at December 31, 2021 and 2020. Assume that net profit for 2021 was $200 million.