Labtech Pharmacy Inc. is authorized to issue an unlimited number of common shares and 100,000 shares of $24 non-cumulative preferred. The company completed the following transactions:

Required

1. Prepare general journal entries to record the transactions.

2. Prepare a statement of changes in equity for the year ended December 31, 2020.

3. Prepare the equity section of the balance sheet as of the close of business on December 31, 2020.

Analysis Component: Calculate the net assets of Labtech Inc. for 2018, 2019, and 2020. Is the trend favourable or unfavourable? Explain.

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2018 Issued 70,000 common shares at $24 for cash. Feb. Gave the corporation's promoters 3,750 common shares for their services in organizing the corporation. The directors valued the services at $96,000. 28 Mar. Issued 44,000 common shares in exchange for the following assets with the indicated reliable market values: land, $192,000; buildings, $504,000; and machinery, $372,000. Closed the Income Summary account. A $64,800 loss was incurred. Dec. 31 2019 Issued for cash 4,000 preferred shares at $240 per share. Closed the Income Summary account. A $235,200 profit was earned. Jan. 28 Dec. 31 2020 The board of directors declared a $24 per share cash dividend to preferred shares and $0.48 per share cash dividend to outstanding common shares, payable on February 5 to the January 24 shareholders of record. Jan. Feb. Paid the previously declared dividends. Closed the Cash Dividends and Income Summary accounts. A $381,600 profit was earned. Dec. 31