E13-18

Amber Wilson, an owner of Canyon Canoe Company, decides to start a new company that will be operated as a corporation, Outdoor Equipment Incorporated (OEI). This company will sell outdoor clothing and equipment. The articles of incorporation for OEI authorize the company to issue 500,000 preferred shares that pay a dividend of $4.00 per year and 1,000,000 common shares.

OEI had the following select transactions in 2022:

Jan 1 Issued 50,000 common shares for a total of $200,000

Jan 10 Issued 2,000 preferred shares in exchange for land with a market value of $70,000

Dec 15 Declared total cash dividends of $15,000

Dec 31 Paid the cash dividends

Required:

1 Journalize the transactions

2. Calculate the balance in Retained Earnings on December 21, 2022. Assume net income for the year was $417,000

3. Prepare the shareholders equity section of the balance sheet as of December 31,2022