Southwestern Exposure Ltd. began operations on January 2, 2020. During the year, the following transactions affected shareholders' equity: 1. 2. 5. 6. 7 Southwestern Exposure's articles of incorporation authorize the issuance of 1,100,000 common shares, and the issuance of 110,000 preferred shares, which pay an annual dividend of $1.80 per share. A total of 265,000 common shares were issued for $6 a share. A total of 20,000 preferred shares were issued for $14 per share. The full annual dividend on the preferred shares was declared. The dividend on the preferred shares was paid. A dividend of $0.10 per share was declared on the common shares but was not yet paid. The company had net income of $158,000 for the year. (Assume sales of $838,000 and total operating expenses of $680,000.) The dividends on the common shares were paid. The closing entry for the dividends declared accounts was prepared. 8. 9. Prepare journal entries to record the above transactions, including the closing entries for net income and dividends declared. (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 for the amounts.) Debit Credit No. Account and explanation 1. 2. 3. 4. 5. 6. 7 (To close revenue account.) (To close expense account.) (To close net income.) 8. 9. e Textbook and Media List of Accounts Question Part Score --/85 Prepare the shareholders' equity section of the statement of financial position as at December 31, 2020. Shareholders' Equity, December 31, 2020 $ Sealand Company has 120,000 common shares outstanding. Because it wants to retain its cash for other purposes, the company decided to issue stock dividends to its shareholders. The market price of each Sealand Company share was $23. Your answer is partially correct. Prepare the journal entries if the company decides to declare and issue a 7% stock dividend. (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 for the amounts.) Account and explanation Debit Credit When declared: Retained Earnings 193200 Stock Dividends Issuable 193200 When issued: Stock Dividends Issuable Common Shares 193200 8400 e Textbook and Media List of Accounts Question Part Score 58.1/70 Your answer is partially correct. Prepare the journal entry if instead of declaring the stock dividend the company decides to split its shares two-for-one. (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 for the amounts.) Account and explanation Debit Credit No Entry 0 No Entry