Unit 5 Assignment - Corporations

Use thistemplateto complete the three parts of the assignment.

Khan Corporation was organized on January 1, 2019.

For the year 2020 it is authorized to issue an unlimited number of $3-noncumulative, no par value preferred shares, and an unlimited number of no par value common shares. The following transactions were completed during the year:

Jan. 10

Issued 100,000 common shares at $2 per share

Mar. 1

Issued 10,000 preferred shares at $42 per share

Apr 1

Issued 25,000 common shares for land. The market value of the common shares was $2.50 per share on this day

May 1

Issued 75,000 common shares at $3 per share

July 24

Issued 16,800 common shares for $60,000 cash and used equipment. The common shares issued had a market value of $4 per share at this date. (Tip: you have to calculate the value of the equipment account)

Nov 1

Issued 2,000 preferred shares at $42 stated value for$48 per share

Dec. 1

Declared a payment of $36,000 of dividends to the preferred stock shareholders and $40,000 to the common stock shareholders

Dec. 10

Preferred and common stock shareholders were recorded

Dec. 15

The dividends were paid

Instructions:

1. Journalize the above transactions

2. Prepare the Retained Earnings Statement. The reported net income for the year is $650,000 and the carried retained earnings from the year before are $40,000.

3.Prepare the shareholders' equity section of the balance sheet at December 31.