P10-2 (Algo) Preparing the Shareholders' Equity Section after Selected Transactions LO10-3, 10-7, 10-8 King Corporation began operations in January. year 1. The charter authorized the following share capital Preferred shares: 9 percent, $28 par value, authorized 54,000 shares Common shares: no par value, authorized 184,500 shares During year 1, the following transactions occurred in the order given: a. Sold and issued 27,000 common shares to each of the three organizers. Collected $10 cash per share from two of the organizers, and received a plot of land with a small building on it in full payment for the shares of the third organizer and issued the shares immediately. Assume that 35 percent of the non-cash payment received applies to the building. b. Sold and issued 7.400 preferred shares at $28 per share. Collected the cash and issued the shares immediately. c. Sold and issued 3,400 preferred shares at $28 and 3.400 common shares at $13 per share. Collected the cash and issued the shares Immediately. d. The operating results at the end of year 1 were as follows: Revenues Expenses, including income taxes. Required: $ 400,000 205,000 Required: 1. Prepare the journal entries to record each of these transactions and to close the accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 Record sale and issue of 81,000 common shares at $10 per share. Note: Enter debits before credits. Transaction General Journal Debit Credit 2. This part of the question is not part of your Connect assignment. 3. Prepare the shareholders' equity section of the statement of financial position for King Corporation at the end of year 1. Share capital KING CORPORATION Shareholders' Equity As at End of Year 1 Total shareholders' equity Calgate Company had the following shares outstanding and retained earnings at the end of the current year: Preferred shares, 4% (par value $30; outstanding, 10,600 shares) Common shares (outstanding, 36,000 shares) Retained earnings $ 318,000 630,000 311,000 The board of directors is considering the distribution of a cash dividend to both groups of shareholders. No dividends were declared during the previous two years. Three independent cases are assumed: Case A: The preferred shares are non-cumulative; the total amount of dividends is $52,200. Case B: The preferred shares are cumulative; the total amount of dividends is $66,000. Case C: Same as case B. except the amount is $99,000. Required: 1. Compute the amount of dividends, in total and per share, that would be payable to each class of shareholders for each case. (Round) "Per share" to 2 decimal places.) Preferred Shares Common Shares Case A Total Per share Case B Total Per share Case C . Prou 2 of 2 Next 2. Assume that the company in Case C issued a 10 percent common stock dividend on the outstanding common shares. The market value per share was $22. on the date of declaration. Complete the following comparative schedule for common shares only, including explanation of the differences. (Enter any decreases to account balances with a minus sign.) item Amount of Dollar Increase (Decrease) Cash Dividend-Case C Stock Dividend Assets Liabilities Shareholders' equity