Chapter 15 organization and operation of Corporation3 Wrightson was on Its articles of incorporation granted the right to issue an number of common shares and 100,000 of $12 cumulative preferred shares. The following transactions are among those that oc during the first three years of operations: Jan. 2011 common shares at S4 each. who provided legal services that 12 Issued 40,000 promoters 20 issued 6,000 common shares to had a value of 31 helped to establish the These for land, building, and and common shares in exchange s400,000, equipment, which have fair market values of S300,000, $40,000 respectively. cash. This was thought to be a Mar. 4 Purchased equipment at a cost of S6,800 have special bargain price. It was felt that at least S9,000 would normally Dec. 31 had to be paid to acquire this equipment. net loss of s80,000. The Income During 2011, Wrightson Corp. incurred a Summary account was closed. 2012 share. Jan. 4 Issued 5,000 preferred shares at $60 per Net income for 2012 was Dec. 31 The Income Summary account was closed. $180,000 Dec. 2013 on the common 4 The company declared a cash dividend of so 10 per share shares payable on December 18 and also declared the required dividend on the preferred shares. 18 Paid the dividends declared on December 4. 31 Net income for the year ended December 31, 2013, was $160,000. The Income Summary and Cash Dividends accounts were closed. Required 1. Journalize the transactions for the years 2011, 2012, and 2013. 2. Prepare the statement of retained earnings for the year ended December 31, 2013. 3. Prepare the shareholders' equity section as of December 31, 2013