Question 1 Dynatech Corporation, a publicly traded company, was organized on January 1, 2018. It is authorized to issue an unlimited number of $3 noncumulative preferred shares and an unlimited number of common shares. The following share transactions were completed during the company's first year of operations: Jan. 10 Issued 970,000 common shares for $2 per share. Mar. 1 Issued 18,000 preferred shares for $50 per share. May 1 Issued 242,500 common shares for $3 per share. June 1 Reacquired and retired 11,000 common shares at $2 per share. Determine the average cost of each reacquired share to the nearest cent before recording this transaction July 24 Issued 30,800 common shares for $123,000 cash and used equipment. The equipment originally cost $27,000. It now has a carrying amount of $13,500 and a current value of $14,500. The common shares were trading for $4 per share on this date. Sept. 4 Issued 11,000 common shares for $5 per share. Nov. 1 Issued 4,400 preferred shares for $50 per share 20 Reacquired and retired 14,000 common shares at $4 per share. Determine the average cost of each reacquired share to the nearest cent before recording this transaction Dec. 14 Declared a $77,000 cash dividend to the preferred shareholders, to shareholders of record on December 31, payable on January 10. 31 Reported net income of $1,200,000 for the year. (a) Record the above transactions for 2018, including any required entries to close dividends declared and net income. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Round average cost per share to 2 decimal palces, e.g. 2.25 and final answers to decimal places.) Transaction entries: Debit Credit Date Account Tities and Explanation Jan. 10 : Cash 1940000 Common Shares 1940000 Mar. 1 : Cash 900000 PRINTER VERSION BAC Record the above transactions for 2018, including any required entries to close dividends declared and net income. (Credit account titles are automatically i when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter o for the amounts average cost per share to 2 decimal palces, e.g. 2.25 and final answers to o decimal places.) Transaction entries: Debit Credit Date Account Titles and Explanation Jan. 10 Cash 1940000 Common Shares 1940000 Mar. 1 Cash 900000 Preferred Shares 900000 May 1 Cash 727500 Common Shares 727500 June 1 Common Shares Contributed Surplus Cash July 24 Cash 123000 Equipment 14500 Common Shares 137500 Sept. 4 : Cash 55000 Common Shares 55000 June 1 , Common Shares Contributed Surplus Cash July 24 Cash 123000 Equipment 14500 Common Shares 137500 Sept. 4 Cash 55000 Common Shares 55000 Nov. 1 Cash 220000 Preferred Shares 220000 Nov. 20 Common Shares 56000 Contributed Surplus Retained Earnings Cash Dec. 14 : No Entry No Entry Closing entries: Closing entries: Date Account Titles and Explanation Debit Credit Dec. 31 (To close cash dividends) Dec. 31 (To close profit) Open T accounts and post to the shareholders' equity accounts. (Record entries in the order presented in the problem.) Preferred Shares Common Shares Contributed Surplus Dividends Declared Retained Earnings Prepare the shareholders' equity section of the statement of financial position at December 31. (Enter account name only and do not provide descriptive information.) LAWN CORPORATION Statement of Financial Position (Partial) Accounts Shareholders' Equity Share Capital Total Shareholders' Equity Cash Dividends Total Share Capital
