Sampson Corporation was organized in 2011 to operate a financial consulting business. The charter authorized the issue of 12,000 common shares. During the first year, the following selected transactions were completed:

a. Issued 6,000 common shares for cash at \(\$ 22\) per share.

b. Issued 600 common shares for a piece of land to be used for a facilities site; construction began immediately. Assume that the market price per share was \(\$ 22\) on the date of issuance. Debit land account.

c. Issued 1,000 common shares for cash at \(\$ 23\) per share.

d. At year-end, the income statement showed a loss of \(\$ 7,000\). Because a loss was incurred, no income tax expense was recorded.

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1. Prepare the journal entry required for each of these transactions.

2. Prepare the shareholders' equity section as it should be reported on the statement of financial position at year-end, December 31, 2011.

3. Can Sampson pay dividends at year-end? Explain.