The shareholder's equity section of the balance sheet of Lexal Inc. included the following

account at December 31, 2014:

Shareholders' Equity ($ in millions)

Paid-in capital:

Common stock, 300 million shares at $1 par $ 300

Paid-in capital-excess of par 900

Retained earnings 3000

Total shareholders' equity 4200

Required:

1. During 2015, several transactions affected the stock of Lexal Inc. Prepare the

appropriate entries for these events.

A. On March 11, Lexal Inc. issued 20 million of its 9.2% preferred shares, $1 par

per share, for $55 per share.

B. On November 22, 2 million common shares, $1 par per share, were issued in

exchange for eight labeling machine. Each machine was built to custom specifications

so no cash price was available. Lexal Inc's stock was listed at $20 per share.

C. On November 23, 2 million of the common shares and 2 million preferred shares were

sold for $50 million. The preferred shares had not traded since March and their market

value was uncertain.

2. Prepare the shareholders' equity section of the comparative balance sheets for Lexal Inc.

at December 31, 2015 and 2014. Assume that net income for 2015 was $500 million and

dividen payment $2 million.