Textbook Questions:

P$132$A & shareholder$$s equity section, assume the following:

Net Income was $$85000$

Dividends of $$13000$ were declared & paid in December

Wetland Corporation, a private corporation, was organized on February $1,2013.$ It is authoirzed to issue $100000$ $$6$ nonculumlative preferred shares, and an unlimited number of common shares. The following transactions were completed during the first year:

Feb. $10$

Issued $80000$ common shares at $$4$ per share

Mar. $1$

Issued $5000$ preferred shares at $$115$ per share

Apr. $1$

Issued $22500$ common shares for land. The asking price of the land was $$100000$ and its appraised calue was $$90000$

June $20$

Issued $78000$ common shares at $$\mathrm{.}4\mathrm{.}50$

July $7$

Issued $10000$ common shares to lawyers to pay for their bill of $$45000$ for servies they performed in helping the company organize

Sept. $1$

Issued $10000$ common shares at $$5$ per share

Nov. $1$

Issued $1000$ preferred shares at $$117$ per share

Instructions:

Journalize the transactions

Determine the number of shares issued and the average cost per share for both common and preferred shares

How many shares is the company authorized to issue for each class of shares?

If the preferred shares were cumulative instead of non$-$cumulative, would this have changed the amount investors were willing to pay for the shares? Explain.