Question
Eddie Edwards Limited, a public company, was formed on January 2, 2014, with the following authorized capital structure: Preferred shares: No par value, $1.00 per
Eddie Edwards Limited, a public company, was formed on January 2, 2014, with the following authorized capital structure: |
Preferred shares: No par value, $1.00 per share quarterly cumulative dividend, callable at 103, 100,000 shares |
Common shares: Unlimited number of shares |
The following selected transactions occurred during the first six months of operations: |
January | 2 | Issued 100,000 common shares in exchange for land and building with a combined appraised value of $2,200,000. Sixty percent of the acquisition cost is attributable to the building. | |
January | 3 | Issued 50,000 preferred shares for $1,250,000 cash. | |
April | 1 | Declared the quarterly cash dividend on the preferred shares, payable on April 25. | |
April | 10 | Declared and distributed a 5 percent common stock dividend on all outstanding common shares as of March 31. The market price of the common shares on March 31 was $24 per share. | |
April | 25 | Paid the preferred dividend that was declared on April 1. |
Required: | |
1. | Prepare journal entries to record the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
2. | Prepare the shareholders equity section of the statement of financial position for Eddie Edwards Limited as at June 30, 2014. Assume that the company recorded net earnings of $500,000 for its first six months. |
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