Hammond Manufacturing Inc. was legally incorporated on January 2, 2020. Its articles of incorporation granted it the right to issue an unlimited number of common shares and 100,000 shares of $14.0 non-cumulative preferred shares. The following transactions are among those that occurred during the first three years of operations: 2020 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 $368,690, $488,000, and $56,800, 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 2020, the company incurred a loss of $104,000. The Income Summary account was closed. 2021 Jan. 4 Issued 3,000 preferred shares at $94 per share. Dec. 31 The Income Summary account was closed. Profit for 2021 was $224,000. 2022 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, 2022, was $226,240. The Income Summary account was closed. 2. Prepare the statement of changes in equity for the year ended December 31, 2022. (Amounts to be deducted should be indicated by a minus sign.) ) Answer is complete but not entirely correct. HAMMOND MANUFACTURING ING. Statement of Changes in Equity For Year Ended December 31, 2022 Preferred Common Shares Shares $ 282,000 $ 763,040 Retained Total Earnings Equity $ $ 120,000 120,000 $ 1,165,040 Balance, January 1 Issuance of shares Profit Dividends Balance, December 31 226.240 (162,888) $ 183,352 226,240 (162,888) $ 1,228,392 $ 282,000 S 763,040 Answer is complete but not entirely correct. HAMMOND MANUFACTURING INC. Equity Section of the Balance Sheet December 31, 2022 Contributed capital: Preferred shares, $14 noncumulative, 100,000 shares authorized, 3,000 shares issued & outstanding Common shares, unlimited shares authorized, 131,400 shares issued and outstanding OS $ 282,000 763,040 Total contributed capital Retained earnings $ 1,045,040 183,352 Total equity $ 1,228,392 Analysis Component: Determine the net assets of Hammond Manufacturing Inc. for 2020, 2021, and 2022. Is the trend favourable or unfavourable? Answer is complete but not entirely correct. Net assets Trend 2020 2021 2022 $ 659,040 $ 1,165,040 $ 1,228,392 $ $ Favourable