Question 4 (20 Marks)

Fuller Corporation has authorized share capital of an unlimited number of common shares and 800,000, $3 preferred shares. On January 1 2020, the balance in its shareholders equity includes:

24,000 common shares valued at $64,000,

2,200 preferred shares valued at $52,000 and

Retained earnings of $116,000.

Profit for the year ending December 31, 2020 was $42,000. No dividends were declared during 2020.

During 2020, Fuller Corporation had the following share transactions:

Mar 1 Issued 4,000 common shares for $6 each.

Jun 30 Issued 1,200 preferred shares for $13 each.

Sep 1 Issued 55,000 common shares in exchange for land valued at $250,000.

Required:

a) Journalize the share transactions. (6 marks)

b) Prepare the equity section of Fuller Corporation balance sheet at December 31, 2020. (14 marks)