Doulane Marine obtained a charter from the province in January 2014 that authorized 1,000,000 common shares. During

Question:

Doulane Marine obtained a charter from the province in January 2014 that authorized 1,000,000 common shares. During the first year, the company earned $429,000 and the following selected transactions occurred in the order given:

a. Issued 700,000 common shares at $54 cash per share.

b. Reacquired and cancelled 25,000 shares at $50 cash per share.

Required:

1. Indicate the effects of each transaction on the accounting equation.

2. Prepare journal entries to record each transaction.

3. Prepare the shareholders' equity section of the balance sheet at December 31, 2014?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...