Problem 12-7A Share transactions, statement of changes in equity, dividend distribution, closing L02, 3, 4, 5, 6 CHECK FIGURES: 2. Retained earnings, Dec. 31, 2022 = $224,880: 3. Total equity = $1,700,880 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 $14.40 non- cumulative preferred shares. The following transactions are among those that occurred during the first three years of operations: 852 CHAPTER 12 Organization and Operation of Corporations 40,000 common shares at $4.80 each remoters who provided legal services that helped to establish the company . issued 400 12 2 are in exchange for land, building, and equipment, which have fair market values of 200, $480,000, and $48.000, respectively issued 6,000 common shares to These services had a fair value of $36,000 sued 80,000 common shares in $360,000, $480,000, and $48.00 Purchased equipment at a cost of te least $10,800 would norma During 2020, the company incur net of $8.160 cash. This was thought to be a special bargain price. It was felt that at normally have had to be paid to acquire this equipment wincurred a loss of $96,000. The Income Summary account was closed, 4 Purch M a 31 Dec 31 d 5,000 preferred shares at $72 per share. Cummary account was closed. Pront for 2021 was $216.000 2021 for 4 issued 5,000 pro Dec 31 The Income Summar 2022 Dec 4 The company declared a cash dividend of $0.12 per share on the common shares payable on December 18 and declared the required dividend on the preferred shares. Paid the dividends declared on December 4. ear ended December 31, 2022, was $192,000. The Income Summary and Cash Dividends 3 Profit for the year ended December accounts were closed. Required Joumalize the transactions for the years 2020, 2021, and 2022. 2. Prepare the statement of changes in equity for the year ended December 31, 2022. 3. Prepare the equity section on the December 31, 2022, balance sheet. Analysis Component: Determine the net assets of Hammond Manufacturing Inc. for 2020, 2021, and 2022. Is the trend favourable or unfavourable? Explain. Problem 12-7A Share transactions, statement of changes in equity, dividend distribution, closing L02, 3, 4, 5, 6 CHECK FIGURES: 2. Retained earnings, Dec. 31, 2022 = $224,880: 3. Total equity = $1,700,880 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 $14.40 non- cumulative preferred shares. The following transactions are among those that occurred during the first three years of operations: 852 CHAPTER 12 Organization and Operation of Corporations 40,000 common shares at $4.80 each remoters who provided legal services that helped to establish the company . issued 400 12 2 are in exchange for land, building, and equipment, which have fair market values of 200, $480,000, and $48.000, respectively issued 6,000 common shares to These services had a fair value of $36,000 sued 80,000 common shares in $360,000, $480,000, and $48.00 Purchased equipment at a cost of te least $10,800 would norma During 2020, the company incur net of $8.160 cash. This was thought to be a special bargain price. It was felt that at normally have had to be paid to acquire this equipment wincurred a loss of $96,000. The Income Summary account was closed, 4 Purch M a 31 Dec 31 d 5,000 preferred shares at $72 per share. Cummary account was closed. Pront for 2021 was $216.000 2021 for 4 issued 5,000 pro Dec 31 The Income Summar 2022 Dec 4 The company declared a cash dividend of $0.12 per share on the common shares payable on December 18 and declared the required dividend on the preferred shares. Paid the dividends declared on December 4. ear ended December 31, 2022, was $192,000. The Income Summary and Cash Dividends 3 Profit for the year ended December accounts were closed. Required Joumalize the transactions for the years 2020, 2021, and 2022. 2. Prepare the statement of changes in equity for the year ended December 31, 2022. 3. Prepare the equity section on the December 31, 2022, balance sheet. Analysis Component: Determine the net assets of Hammond Manufacturing Inc. for 2020, 2021, and 2022. Is the trend favourable or unfavourable? Explain