Question One: - Share transactions, statement of changes in equity, dividend distribution

Williams Manufacturing Inc., was legally incorporated on January 2nd 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.

2020

Jan 12 Issued 40,000 common shares at $4.80 each

20Issued 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.

31Issued 80,000 common shares in exchange for land, building and equipment, which have fair market values of $360.000, $480.000, and $48,000 respectively.

Mar4Purchased 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 31During 2020, the company incurred a loss of $36,000. The Income

Summary account was closed.

2021

Jan4Issued 5,000 preferred shares at $72 per share

Dec31The Income Summary account was closed. Profit for 2021 was $216,000

2022

Dec `4`The company declared a cash dividend of $0.12 per share on the common shares payable on December 18th and also declared the required dividend on the preferred shares.

18Paid the dividends declared on December 4th .

31Profit for the year ended December 31st 2022, was $192,000. The Income

Summary and Cash Dividend accounts were closed.

Required:

1. Journalize the transactions for the years 2020, 2021 and 2022

2. Prepare the statement of changes in equity for the year ended December 31st, 2022