Time left 2:54:56 Question 4 Not yet answered Marked out of 13 Flag question EXFO Inc. (EXFO) is a private company founded in 2018 with an unlimited number of common shares and 50,000 shares of $3 cumulative and participating preferred shares authorized. The following transactions occurred in the first three years of EXFO's operations: 1. On January 30, 2018, EXFO sold 100,000 common shares by subscription to five individuals, who each purchased 20,000 shares for $50 per share. The subscription contract requires 10% of the balance to be paid in cash immediately and the rest to be paid by December 31, 2019, at which time the shares will be issued. 2. On July 1, 2018, EXFO issued a combination of 3,000 common and 1,000 preferred shares to a new shareholder for a total price of $300,000. EXFO used the most recent sale of common shares to measure their value in this transaction. 3. On December 31, 2019, three of the five subscribers of common shares as of January 30, 2018, paid in full but the other two subscribers defaulted. According to the subscription contract, the defaulting subscribers were refunded the cash paid and were not issued shares subscribed. 4. The net income of EXFO is $200,000 in 2018, 600,000 in 2019, and $1,000,000 in 2020. On December 31, 2020, EXFO declared a dividend of $292,000. Requirements (20 minutes, 13 marks) (a). Prepare the journal entries for the above four transactions. (b). Calculate the dividend to common shareholders declared on December 31, 2020. (c). Prepare the shareholders' equity section of the SFP as of December 31, 2020 for EXFO. Time left 2:54:56 Question 4 Not yet answered Marked out of 13 Flag question EXFO Inc. (EXFO) is a private company founded in 2018 with an unlimited number of common shares and 50,000 shares of $3 cumulative and participating preferred shares authorized. The following transactions occurred in the first three years of EXFO's operations: 1. On January 30, 2018, EXFO sold 100,000 common shares by subscription to five individuals, who each purchased 20,000 shares for $50 per share. The subscription contract requires 10% of the balance to be paid in cash immediately and the rest to be paid by December 31, 2019, at which time the shares will be issued. 2. On July 1, 2018, EXFO issued a combination of 3,000 common and 1,000 preferred shares to a new shareholder for a total price of $300,000. EXFO used the most recent sale of common shares to measure their value in this transaction. 3. On December 31, 2019, three of the five subscribers of common shares as of January 30, 2018, paid in full but the other two subscribers defaulted. According to the subscription contract, the defaulting subscribers were refunded the cash paid and were not issued shares subscribed. 4. The net income of EXFO is $200,000 in 2018, 600,000 in 2019, and $1,000,000 in 2020. On December 31, 2020, EXFO declared a dividend of $292,000. Requirements (20 minutes, 13 marks) (a). Prepare the journal entries for the above four transactions. (b). Calculate the dividend to common shareholders declared on December 31, 2020. (c). Prepare the shareholders' equity section of the SFP as of December 31, 2020 for EXFO