On January 1, 2016, the Canwest Corporation began operations. It was authorized to issue 20,000 voting common shares and 10,000 cumulative, non-voting preferred shares. The dividend on each preferred share is $1 per year. The company issued 4,000 common shares for $120,000 on January 2, 2016. No preferred shares were issued in 2016. The retained earnings balance on December 31, 2016 was $145,000. During 2017 the following transactions occurred:
|
Feb. |
15 |
Issued 1,000 common shares at $8 each. |
|
Mar. |
1 |
Acquired land with an appraised market value of $40,000 in exchange for 1,500 preferred shares. |
|
Jun. |
1 |
Declared a $1 cash dividend on outstanding common shares and the annual cash dividend on outstanding preferred shares payable July 1 to shareholders of record on June 25. |
|
July |
1 |
Paid the June 1 dividend. |
|
Dec. |
15 |
Declared a $.40 cash dividend on each outstanding common share, payable January 15, 2018. |
|
Dec. |
31 |
Net income for the year was $98,000. |
Required:
- Prepare journal entries to record the 2017 transactions, including closing entries. Descriptions are not necessary.
- Prepare the shareholders’ equity section of the balance sheet at December 31, 2017 and the related note to the financial statements.
- Prepare the statement of changes in equity for the year ended December 31, 2016.
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