Elville Inc

question 58

Essay

Elville Inc.was incorporated under provincial legislation with a December 31 year-end.The company has a single class of shares.As at December 31,2011,it had 900,000 shares issued and outstanding.These shares had a book value of $18,000,000 on the balance sheet.
During 2012,Elville repurchased 10% of the issued shares from one of the minority shareholders at a cost of $25 per share.The company held these in treasury and later found a buyer for half of these shares at $30.The other half were sold at $21 to another investor.
Requirement:
Record the share transactions using the single-transaction method for treasury stock,which is the preferred accounting method.

---

Definitions:

Foreign Subsidiary

A foreign subsidiary is a company that is owned or controlled by another company but operates in a different country from the parent company.

Parent Company

is a corporation that owns enough voting stock in another firm to control its board of directors and therefore its operational and financial policies.

Forward Rate

The agreed-upon exchange rate for a currency pair to be traded at a future date, used in forward contracts.

Exchange Rate

The cost of converting one currency into another, establishing the equivalent worth of one currency in relation to another.