Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2019, the shareholders equity section of Graham Corporation had the following equity accounts: Share Capital-Preference, 10%, $100 par value, 100,000 shares authorized

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
On January 1, 2019, the shareholders equity section of Graham Corporation had the following equity accounts: Share Capital-Preference, 10%, $100 par value, 100,000 shares authorized and 4,000 shares issued $400,000 Share Capital- Ordinary, S2 par value, 500,000 shares authorized, 100,000 shares issued and outstanding 200,000 Share Premium- Preference 60,000 Share Premium-Ordinary 150,000 Retained Earnings 120,000 The following transactions occurred during 2019, the first year of operations: Jan. 4 Issued 22,000 ordinary shares for cash at $15 per share. Jan. 8 Issued 1,000 preference shares for cash of $110,000. Feb.1 2 Issued an additional 600 ordinary shares to Donald Law Firm in exchange for the services provided in organizing the corporation. The services provided was worth $8,000. Mar. 3 The corporation purchased 1,700 ordinary shares for treasury at a price of $12 per share. Apr. 6 Acquired land as a future building site in exchange for 16,000 ordinary shares. The fair market value of land was $160,000. May 2 Sold 900 shares of the treasury shares for cash at a price of $15 per share. June 30 Declared 3% share dividends on 137,800 ordinary shares outstanding. The market value of ordinary shares on this date was $22 per share. July 5 Issued the shares for the share dividend. Dec. 15 The board of directors declared the first annual $50,000 cash dividends on the preference shares, to be paid on January 15, 2020. Dec. 31 Reported a net income of $250,000 for the accounting year. Dec. 31 Close the dividend accounts. Instructions: (a) Journalize the above transactions. (b) Prepare the equity section of Graham Corporation as at Dec 31, 2019. Account Title Debit Credit (a) Date 2019 Jan. 4 Jan. 8 Feb. 121 March 3 April 6 May 2 June 30 July 5 Dec 15 Dec. 15 Dec. 31 Dec. 31 (b) Equity section Graham Corp. Statement of Financial Position December 31, 2019 Shareholder's Equity: Dec. 31 (b) Equity section Graham Corp. Statement of Financial Position December 31, 2019 Shareholder's 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

Students also viewed these Accounting questions

Question

=+ Where do we want to go?

Answered: 1 week ago