E10-21A. (Learning Objective 2: Preparing shareholders’ equity section of a Balance Sheet)

Army Navy Sporting Goods is authorized to issue 10,000 preference shares and 20,000 ordinary shares. During a two-month period, Army Navy completed these share-issuance transactions:

Requirement 1. Prepare the shareholders’ equity section of the Army Navy Sporting Goods’ Balance Sheet for the transactions given in this exercise. The Retained Earnings account currently has a balance of $45,000. Journal entries are not required.

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Apr. 23 May 2 12 Issued 1,800 shares of $1.50 par ordinary share for cash of $16.50 per share. Issued 800 shares of no-par preference share for $24,000 cash. Received inventory valued at $20,000 and equipment with market value of $40,000 for 3,200 shares of the $1.50 par ordinary share.