Laurentian Corporation had the following shareholders' equity at January 1, 2014.
Preferred shares, 8%, $100 par value, 10,000 shares authorized, 4,000 shares issued .......... $ 400,000
Common shares, $2 par value, 200,000 shares authorized, 80,000 shares issued .................. 160,000
Common shares subscribed, 10,000 shares ............................................................... 20,000
Contributed surplus-preferred ............................................................................ 20,000
Contributed surplus-common ........................................................................... 940,000
Retained earnings ........................................................................................... 780,000
2,320,000
Less: Common share subscriptions receivable ........................................................... 40,000
Total shareholders' equity .............................................................................. $2,280,000
The contributed surplus accounts arose from amounts received in excess of the par value of the shares when issued. During 2014, the following transactions occurred:
1. Equipment was purchased in exchange for 100 common shares. The shares' fair value on the exchange date was $12 per share.
2. Sold 1,000 common shares and 100 preferred shares for the lump-sum price of $24,500. The common shares had a market price of $14 at the time of the sale.
3. Sold 2,000 preferred shares for cash at $102 per share.
4. All of the subscribers paid their subscription prices into the firm.
5. The common shares subscribed were issued.
6. Repurchased and retired 1,000 common shares at $15 per share.
7. Net income for 2014 was $246,000.
Instructions
Prepare the shareholders' equity section for the company as at December 31, 2014. (The use of T accounts may help you organize the material.)