On January 1, a corporation had 30,000 of common shares outstanding originally issued at $610,600. The corporation is authorized to issue an unlimited number of common shares. The balance of retained earnings on that date was $980,800. The following transactions occurred during the current year. Calculate average cost to the nearest $0.01:

Jan. 16 Sold 6,000 common shares to investors at $9.00 per share in cash.

Mar. 20 Buyback (repurchase) 2,000 of its own common shares from investors at $23.00 per share with cash.

Sept. 6 Board of Directors declared a 10% stock dividend to common shareholders owing shares as of Sept 15. The market price per common share was $15.00 on September 6 and the stock dividend was distributed to shareholders on October 3.

Nov. 7 Board of Directors declared a $0.30 per share cash dividend to common shareholders. The date of record was November 15 and the payment date was November 29.

Dec. 31 The Corporation reported a net loss for the year of $70,000.

Instructions

a) Prepare the journal entries related to the above transactions. Calculate to the nearest dollar.

b) Prepare the shareholders equity section of the balance sheet on December 31.