Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2018, Sweetwater Ltd., a private company, had the following shareholders' equity accounts: Preferred shares, $1 noncumulative, unlimited number authorized, none issued Common

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
On January 1, 2018, Sweetwater Ltd., a private company, had the following shareholders' equity accounts: Preferred shares, $1 noncumulative, unlimited number authorized, none issued Common shares, unlimited number authorized, 2.06 million issued Retained earnings $2,860,000 3,470,000 The following selected transactions occurred during 2018: Jan. 2 Issued 210,000 preferred shares at $25 per share. Feb. 8 Issued 100,000 common shares in exchange for land. On this date, the current value of the land was $210,000. The common shares have not recently traded, but the last time they traded, they sold for $2.50 per share. Mar. 5 Declared the quarterly cash dividend to preferred shareholders of record on March 20, payable April 2 Apr. 18 Issued 390,000 common shares at $3.00 per share. June S Declared the quarterly cash dividend to preferred shareholders of record on June 20, payable July 1. Sept. 5 Declared the quarterly cash dividend to preferred shareholders of record on September 20, payable October 1. Oct. 4 Issued 36,000 preferred shares at $25 per share. Dec. 5 Declared the quarterly cash dividend to preferred shareholders of record on December 20, payable January 1 14 Declared a cash dividend of $0.50 per share to the common shareholders of record on December 31, payable January 10 31 Net Income for the year was $1.10 million Closing entries: Date Account Titles and Explanation Debit Credit I Dec. 31 Income Summary ll Tretained Earnings (To record net income/loss)) IlIlI llllll III Il II LLL Dec. 31 Retained Earnings II Il Dividends Declared] 11 (To close dividends) Open T accounts and post to the shareholders' equity accounts. (Recor Preferred Shares Common Shares Retained Earnings X Dividends Declared Prepare a statement of retained earnings for the year. (List items that increase retained earnings first.) SWEETWATER LTD, Statement of Retained Earnings Prepare the shareholders' equity section of the statement of financial position at December 31. (Enter account name only and do not provide descriptive information.) SWEETWATER LTD. Statement of Financial Position (Partial) December 31, 2018 Shareholders' Equity Share Capital Preferred Shares Common Shares Total Share Capital maddi Retained Earnings Total Shareholders' Equity

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

Step: 3

blur-text-image

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

Cost And Management Accounting

Authors: Duncan Williamson

1st Edition

0132059231, 978-0132059237

More Books

Students also viewed these Accounting questions