Belinger Cooling Ltd. supplies and installs air conditioners to new homes. The share- holders' equity account balances as at July 1, 2015, are shown below:
$1.60 preferred shares (750,000 authorized,
200,000 issued and outstanding) . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,400,000
Common shares (unlimited authorized,
750,000 issued and outstanding) . . . . . . . . . . . . . . . . . . . . . . . . . 12,000,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,057,823
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . 0
Following are some selected transactions affecting the shareholders' equity during the year:
Jul. 3. Declared quarterly dividends of $120,000 to be paid September 30, to shareholders of record on August 28. Belinger Cooling uses a cash dividends account.
Sep. 15. Issued 50,000 preferred shares for $48 per share.
30. Paid the cash dividends.
Oct. 5. Declared quarterly dividends of $130,000 to be paid December 31, to shareholders of record on November 24.
Dec. 31. Paid the cash dividends.
Jan. 4. Issued 125,000 common shares for $20 per share.
7. Declared quarterly dividends of $135,000 to be paid March 31, to shareholders of record on February 21.
Mar. 31. Paid the cash dividends.
Apr. 15. Declared quarterly dividends of $145,000 to be paid June 30, to shareholders of record on May 20.
Jun. 30. Paid the cash dividends.
Prepared the year-end closing entries with net income of $734,800 and other comprehensive income of $53,900. Belinger Cooling uses the income summary account when preparing the closing entries.
Instructions
1. Journalize the transactions.
2. Prepare a statement of changes in equity.
3. Prepare the shareholders' equity section of the balance sheet as at June 30, 2016.