12-7B

CHAPTER 12 Organization and Operation of Corporations Problem. 1273 Share transactions, statement of changes in equity, dividend distribution, CHECK FIGURES: 2. Retained earnings, December 31, 2020 = $399,480; 3. Total equity = $4,203,480 $24 non-cumulative preferred. The company completed the following transactions: issued 70.000 common shares at $24 for cash directors valued the services at $96,000 3 land $192.000, buildings. $504,000; and machinery, $372.000 Closed the income Summary account. A $64,800 loss was incurred. Labtech Pharmacy Inc. is authorized to issue an unlimited number of common shares and 100.000 Gave the corporation's promoters 3.750 common shares for their services in organizing the corporation. The issued 44.000 common shares in exchange for the following assets with the indicated reliable market value Pace Oil & Gas Corp. began operations in 2018. Its balance sheet reported the following components of 2018 Feb 5 28 Mar Dec 31 2019 Jan. 28 31 2020 Jan 1 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, Feb 5 Paid the previously declared dividends. Dec. 31 Closed the Cash Dividends and Income Summary accounts. A $381,600 profit was earned. on December 31, 2018. Issued for cash 4,000 preferred shares at $240 per share. Closed the income Summary account. A $235,200 profit was earned. Dec 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 form able or unfavourable? Explain. Problem 12-8B Share transactions, dividends, statement of changes in equity LO2, 3, 4, 5, 6 CHECK FIGURES: 2 Retained earnings, Dec. 31, 2020 = $754,500; 3. Equity, Dec. 31, 2020 = $4,345,500