Question 1 [30 points]

Allarco Inc. was authorized to issue an unlimited number of common shares. During October 2014, their first month of operations, the following selected transactions occurred:

1. October 1: 11,000 common shares were issued in exchange for land valued at $11,000.
2. October 11: Gave the corporation's promoters 7,000 common shares for their services in organizing the corporation. The directors valued the services at $51,800.
3. October 13: Issued 11,000 common shares at $4.10 per share for cash.
4. October 14: 8,000 of the common shares were issued for a total of $40,000 cash.
5. October 31: Closed the Income Summary account. An income of $60,000 was earned.

a) Prepare journal entries for the above transactions, entering the transaction letter as the explanation, and the dates in the format dd/mmm, (ie. 15/Jan).

General JournalPage GJ5DateAccount/ExplanationFDebitCredit

b) Prepare the equity section of the balance sheet of Allarco Inc. at October 31, 2014.

Allarco Inc.Equity Section of Balance sheetOctober 31, 2014Common shares, unlimited shares authorized;

shares issued and outstanding

(Select one) (Select one)

c) What was the average issue price per common share?