Largent Corporation, a publicly traded company, is authorized to issue 200,000 no par value $4 cumulative preferred shares and an unlimited number of no par value common shares. On January 1, 2012, the general ledger contained the following shareholders' equity accounts:
Preferred shares (8,000 shares issued)...........................$ 440,000
Common shares (70,000 shares issued)......................... 1,050,000
Contributed capital-reacquisition of preferred shares............25,000
Retained earnings.....................................................800,000
Accumulated other comprehensive income.........................10,000
The following equity transactions occurred in 2012:
Jan. 10 Reacquired and retired 10,000 common shares for $240,000.
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 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 required closing entries.
(b) Open T accounts and post to the shareholders' equity accounts.
(c) Prepare the statement of changes inequity for the year.
(d) Prepare the shareholders' equity section of the statement of financial position at December 31, including any required note disclosure.