15 Marks Question 1 Lincoln-Priest Ltd was incorporated in 2015. At 31 December 2015, the Lincoln Priest balance sheet showed the following shareholders' equity: Ordinary share capital, 61 000 shares issued, fully paid Preference share capital ($1.40 per share annual dividend) none issued Retained earnings Total shareholders' equity $102000 29000 $131000 Required: (1 mark) (a) Were operations during 2015 profitable? Give your reason. (1 mark) (b) At what price per share did Lincoln-Priest issue the ordinary shares? (c) During 2016, the company completed the following selected transactions. Journalise each transaction. Explanations are not required. Accepted applications for 2 400 ordinary shares at a total issue price of $5 per share and received an initial payment of one-half of that amount. The shares were allotted immediately. Issued 2 600 preference shares for cash of $20 per share. Made a call on the partly paid ordinary shares for the balance of the issue price and received the full amount due on the call. iv. Profit for the year was $74000, and the company declared no dividends. Make the closing entry for the profit. (6 marks) (d) Prepare the Shareholders' equity section of the Lincoln-Priest Ltd balance sheet as at 31 December 2015 (6 marks) How much in annual cash dividends will Lincoln-Priest expect to pay on its (e) preference shares? (1 mark)