Required:

a) Prepare the journal entries for the following dates

jan 31

may 1

july 31

august 31

nov 1

nov 30

i) Why did the directors likely decide to issue common shares as opposed to preferred shares to finance the new fibre optic technology? What is the disadvantage of issuing the common shares? (2 marks)

ii) Calculate the minimum amount of preferred dividends paid in 2021.

Please show all calculations supporting your answer. (2 marks)

iii) Calculate the ending balance in retained earnings as at December 31, 2022

Please show all calculations supporting your answer. (3 marks)

Question 1 Shareholders' Equity (24 marks) On December 31, 2021, Vancouver TV Inc. disclosed the following information in the Shareholders' Equity section of its annual financial statements: Preferred shares $9, cumulative redeemable at $102 100,000 shares authorized 55,000 shares issued and outstanding $ 5,500,000 Common shares Unlimited number of shares authorized 3,000,000 shares issued and outstanding 60,000,000 Retained Earnings 11,000,000 $76,500,000 Dividends in arrears total $110,000. The following is a list of transactions/events that took place in the year ended December 31, 2022: On January 31st the Board of Directors declared and paid dividends of $0.60 on its common shares In order to finance the acquisition of new fibre optic technology for its high- definition service, the company issued 2,000,000 common shares at $25 per share on May 18 . With company shares trading at an all-time high of $40 per share, the Directors split the shares 3 for 1 on July 31st On August 31st the company redeemed 25,000 preferred shares The Directors declared a 5% share dividend on November 18 issuable on November 30th - the shares were trading at $42 per share on November 1st and $44 on November 30th The company reported net income of $6,000,000 for the year ended December 31 Income Statement For Year ended December 31st Sales $479,892 $161,644 58,800 17,374 Cost of goods sold Amortization expense Other expenses Income tax expense Interest expense Loss on sale of equipment 10,185 5,822 16,800 (270,625) Net Income $209,267