Problem 12-7A Share transactions , statement of changes in equity , dividend distribution , closing .02, 3 , 4, 5, 6 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 non - cumulative preferred shares . The following transactions are among those that occurred during the first three years of operations : \$14.40 2020 Jan. 12 Issued 40,000 common shares at $ 4.80 each . 20 Issued 6,000 common shares to promoters who provided legal services that helped to establish the company . These services had a fair value of $ 36,000 . 31 Issued common shares in exchange for land , building , and equipment , which have fair marke t values of $ 360,000 , $ 480,000 , and $ 48,000 , respectively . Mar. 4 Purchased equipment at a cost of $ 8,160 cash . This was thought to be a special bargain price . It was felt that at least $ 10,800 would normally have had to be paid to acquire this equipment Dec. 31 During 2020 , the company incurred a loss of $ 96,000 . The Income Summar a