Question

Fir Corporations prepares financial statements under IFRS. Fir’s charter authorized 400,000 common shares and 60,000 5% cumulative and non-participating preferred shares.

The corporation had the following share transactions between the date of incorporation on January 1, 2019 and December 31, 2019

a) Issued 60,000 common shares for $2,400,000
b) Issued 40,000 common shares for $1,760,000
c) Issued 15,000 cumulative $5 non-participating preferred shares in exchange for

machinery valued at $915,000
d) Received subscriptions for 8,000 common shares and collected 25% of the subscription

price of $45.00 per share. Shares will be issued only on payment in full. e) Reacquired and cancelled 5,000 common shares at $36 per share
f) No dividends have been declared or paid

At December 31, 2019. Fir’s retained earning balance was $1.3 million.

Instructions:

Prepare the shareholders’ equity section of the statement of financial position in good form: Include the required disclosure of number of shares authorized and issued & outstanding. If you are faced with a choice, make a note of your choice.

To save time, assume this title has been provided for you in your answer:

Answer 1

Equity section = 6285000

Solution attached below

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