The Struther's Corporation was organized on January 1, 2003. It is authorized to issue 40,000 shares of $8, no par value cumulative preferred shares and 5,000,000 common shares of no par value with a stated value of $2 per share. The following share transactions were completed during the first year:

Jan. 10

Issued 90,000 common shares for cash at $4 per share.

Mar. 1

Issued 10,000 preferred shares for cash at $106 per share.

Apr. 1

Issued 20,000 common shares for equipment. The asking price of the equipment was $84,000; the fair market value of the shares on this date was $78,000.

June 20

Issued 90,000 common shares for cash at $5 per share.

Aug. 1

Issued 20,000 common shares to lawyers in payment for their bill of $84,000 for services rendered in helping the company organize.

Sept. 1

Issued 20,000 common shares for cash at $4.50 per share.

Nov. 1

Issued 2,000 preferred shares for cash at $109 per share.

Instructions

(a) Journalize the transactions.

(b) Post to the shareholders' equity accounts.

(c) Assuming that that net income for the year was $316,000, prepare the shareholders' equity section of the balance sheet at December 31, 2003.

(d) Assuming that that net income for the year was $316,000, calculate return on equity and book value per common share at December 31, 2003.