Robert Corporation was organized in 2013. At December 31, 2013, Robert Corporations balance sheet reported the following

Question:

Robert Corporation was organized in 2013. At December 31, 2013, Robert Corporation’s balance sheet reported the following shareholders’ equity:

Shareholders’ Equity

Share Capital:

Preferred Shares, 6%, 35,000 shares authorized, none issued .... $ 0

Common Shares, 120,000 shares authorized,

11,000 shares issued and outstanding ............ 44,000

Total Share Capital................... 44,000

Retained Earnings (deficit)................ (5,000)

Total Shareholders’ Equity...............$39,000

Requirements

Answer the following questions and make journal entries as needed:

1. What does the 6% mean for the preferred shares? After Robert Corporation issues preferred shares, how much in annual cash dividends would Robert Corporation expect to pay on 1,000 shares?

2. At what price per share did Robert Corporation issue the common shares during 2013?

3. Were the first-year operations profitable? Give your reasons.

4. During 2014, the company completed the following selected transactions. Journalize each transaction. Explanations are not required.

a. Issued for cash 2,000 preferred shares at $10 per share.

b. Issued for cash 1,500 common shares at a price of $5 per share.

5. Prepare the shareholders’ equity section of the Robert Corporation balance sheet at December 31, 2014. Assume net income for the year was $65,000.

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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...