Largent Corporation, a publicly traded company, is authorized to issue 200,000 $4 cumulative preferred shares and an

Question:

Largent Corporation, a publicly traded company, is authorized to issue 200,000 $4 cumulative preferred shares and an unlimited number of common shares. On January 1, 2015, the general ledger contained the following shareholders' equity accounts:

Preferred shares (8,000 shares issued) ..........................$ 440,000

Common shares (70,000 shares issued) ........................1,050,000

Additional contributed capital .................................. 25,000

Retained earnings ................................................. 800,000

Accumulated other comprehensive income ................... 10,000

The following equity transactions occurred in 2015:

Feb. 6 Issued 10,000 preferred shares for $600,000.

Apr. 6 Issued 20,000 common shares for $560,000.

May 29 Declared a semi-annual cash dividend to the preferred shareholders of record at June 12, payable July 1.

Aug. 22 Issued 5,000 common shares in exchange for a building. At the time of the exchange, the building was valued at $165,000 and the common shares at $150,000.

Dec. 15 The board decided there were insufficient funds to declare the semi-annual dividend to the preferred shareholders.

31 Profit for the year was $582,000.

Instructions

(a) Record the above transactions, including any entries required to close dividends and profit to Retained Earnings.

(b) Open T accounts and post to the shareholders' equity accounts.

(d) Prepare the shareholders' equity section of the statement of financial position at December 31, including any required note disclosure.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...