Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hammond Manufacturing Inc. was legally incorporated on January 2, 2017. Its articles of incorporation granted it the right to issue an unlimited number of common

Hammond Manufacturing Inc. was legally incorporated on January 2, 2017. Its articles of incorporation granted it the right to issue an unlimited number of common shares and 100,000 shares of $14.0 noncumulative preferred shares. The following transactions are among those that occurred during the first three years of operations:

2017
Jan. 12 Issued 40,400 common shares at $5.6 each.
20

Issued 3,000 common shares to promoters who provided legal services that helped to establish the company. These services had a fair value of $44,000.

31

Issued 88,000 common shares in exchange for land, building, and equipment, which have fair market values of $368,000, $488,000, and $56,000 respectively.

Mar. 4

Purchased equipment at a cost of $8,240 cash. This was thought to be a special bargain price. It was felt that at least $11,600 would normally have had to be paid to acquire this equipment.

Dec. 31 During 2017, the company incurred a loss of $104,000. The Income Summary account was closed.
2018
Jan. 4 Issued 3,000 preferred shares at $94 per share.
Dec. 31 The Income Summary account was closed. Profit for 2018 was $224,000.
2019
Dec. 4

The company declared a cash dividend of $0.92 per share on the common shares payable on December 18 and also declared the required dividend on the preferred shares.

18 Paid the dividends declared on December 4.
31

Profit for the year ended December 31, 2019, was $226,240. The Income Summary account was closed.

Prepare the statement of changes in equity for the year ended December 31, 2019

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services An Integrated Approach

Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley

11th Edition

0131867121, 978-0131867123

More Books

Students also viewed these Accounting questions

Question

Simplify each of the following. (x 6 )(x -4 )

Answered: 1 week ago