24 25 Required: 26 Part 1 (8 marks) 27 Prepare journal entries to record the transactions and closing entries for 2020 (assume the retirements 28 were the first ever recorded by the company). Assume share dividends and cash dividends account is used 29 when dividends are declared. If no entry is required for a transaction/event, indicate "No entry required". 30 **Please leave one line of space between each entry.** Part 2 (8 marks) Prepare the Statement of Changes in Equity for the year ended November 30, 2020. (Amounts to be deducted should be indicated by a minus sign.) Date Account Titles Debit Credit 36 37 39 40 1 Equity (16 marks) 2 3 Downspout Corporation report the following equity account balances on November 30, 2019: 4 5 Preferred shares, $3.60 cumulative, unlimited shares authorized 6 Common shares, unlimited shares authorized, 25,500 shares issued 7 and outstanding 8 Retained earnings 703,800 335,000 10 In 2020, the company had the following transactions affecting shareholders and the shareholders' equity accounts: 11 12 Jan 5 Purchased and retired 3,100 common shares at $36 per share. 13 Jan 20 The directors declared a 8% share dividend distributable on February 5 to the January 30 14 shareholders of record. The shares were trading at $46.70 per share. 15 Jan 30 Date of record regarding the 8% share dividend. 16 Feb 5 Date of distribution regarding the 8% share dividend. 17 May 10 Sold 6,100 preferred shares at $71 per share. 18 Sept 5 The directors declared a total cash dividend of $48,010 payable on October 5 to the September 20 19 shareholders of record. 20 Oct 5 The cash dividend declared on September 5 was paid. 21 Nov 30 Closed the $476,600 credit balance in the Profit Summary account to Retained Earnings. 22 Nov 30 Closed the dividend accounts. 23 24 25 Required: 26 Part 1 (8 marks) 27 Prepare journal entries to record the transactions and closing entries for 2020 (assume the retirements 28 were the first ever recorded by the company). Assume share dividends and cash dividends account is used 29 when dividends are declared. If no entry is required for a transaction/event, indicate "No entry required". 30 **Please leave one line of space between each entry.** Part 2 (8 marks) Prepare the Statement of Changes in Equity for the year ended November 30, 2020. (Amounts to be deducted should be indicated by a minus sign.) Date Account Titles Debit Credit 36 37 39 40 1 Equity (16 marks) 2 3 Downspout Corporation report the following equity account balances on November 30, 2019: 4 5 Preferred shares, $3.60 cumulative, unlimited shares authorized 6 Common shares, unlimited shares authorized, 25,500 shares issued 7 and outstanding 8 Retained earnings 703,800 335,000 10 In 2020, the company had the following transactions affecting shareholders and the shareholders' equity accounts: 11 12 Jan 5 Purchased and retired 3,100 common shares at $36 per share. 13 Jan 20 The directors declared a 8% share dividend distributable on February 5 to the January 30 14 shareholders of record. The shares were trading at $46.70 per share. 15 Jan 30 Date of record regarding the 8% share dividend. 16 Feb 5 Date of distribution regarding the 8% share dividend. 17 May 10 Sold 6,100 preferred shares at $71 per share. 18 Sept 5 The directors declared a total cash dividend of $48,010 payable on October 5 to the September 20 19 shareholders of record. 20 Oct 5 The cash dividend declared on September 5 was paid. 21 Nov 30 Closed the $476,600 credit balance in the Profit Summary account to Retained Earnings. 22 Nov 30 Closed the dividend accounts. 23