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 $14.1 non-cumulative preferred shares. The following transactions are among those that occurred during the first three years of operations:

2020
Jan.	12		Issued 40,350 common shares at $4.5 each.
	20		Issued 5,000 common shares to promoters who provided legal services that helped to establish the company. These services had a fair value of $33,000.
	31		Issued 77,000 common shares in exchange for land, building, and equipment, which have fair market values of $357,000, $477,000, and $45,000, respectively.
Mar.	4		Purchased equipment at a cost of $8,130 cash. This was thought to be a special bargain price. It was felt that at least $10,500 would normally have had to be paid to acquire this equipment.
Dec.	31		During 2020, the company incurred a loss of $93,000. The Income Summary account was closed.
2021
Jan.	4		Issued 6,000 preferred shares at $69 per share.
Dec.	31		The Income Summary account was closed. Profit for 2021 was $213,000.
2022
Dec.	4		The company declared a cash dividend of $0.52 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 $181,575. The Income Summary account was closed.

1. Journalize the transactions for the years 2020, 2021, and 2022. The company does not use a cash dividends account.

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.)

3. Prepare the equity section on the December 31, 2022, balance sheet.

Analysis Component: Determine the net assets of Hammond Manufacturing Inc. for 2020, 2021, and 2022. Is the trend favourable or unfavourable?