Your Environment Ltd. manufactures household cleaning supplies. The shareholders' equity accounts of Your Environment Ltd., with balances on January 1, 2015, are as follows:
Common shares (1,000,000 shares authorized,
430,000 shares issued and outstanding) . . . . . . . . . . . . . . $9,460,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,230,000
The following selected transactions occurred during the year:
Jan. 7. Paid cash dividends of $0.13 per share. The dividend had been properly recorded when declared on November 30 of the preceding fiscal year.
Feb. 9. Issued 40,000 common shares for $960,000.
Jul. 1. Issued 14,200 common shares at $25.75 per share.
Dec. 30. Declared a $0.25-per-share dividend. Your Environment does not use a cash dividends account.
31. Recorded the closing entry for the income for the year of $732,000.
Instructions
1. Journalize the entries to record the transactions.
2. Prepare a statement of retained earnings for the year ended December 31, 2015.
3. Prepare the shareholders' equity section of the December 31, 2015, balance sheet.