Ujjal Corporation, a publicly traded company, is authorized to issue an unlimited number of $5 noncumulative preferred

Question:

Ujjal Corporation, a publicly traded company, is authorized to issue an unlimited number of $5 noncumulative preferred shares and an unlimited number of common shares. On February 1, 2015, the general ledger contained the following shareholders' equity accounts:

Preferred shares (44,000 shares issued) .......................$ 440,000

Common shares (70,000 shares issued) .......................1,050,000

Additional contributed capital ................................. 75,000

Retained earnings...................................................1,000,000

Accumulated other comprehensive income .................. 65,000

The following equity transactions occurred during the year ended January 31, 2016:

Feb. 28 Issued 1,500 preferred shares for $150,000.

Apr. 12 Issued 100,000 common shares for $3.5 million.

May 25 Issued 2,500 common shares in exchange for land. At the time of the exchange, the land was valued at $85,000 and the common shares at $87,500.

Dec. 29 Declared a $2.50 per share cash dividend to the preferred shareholders of record at January 15, payable February 1.

Jan. 31 A loss of $5,000 was incurred for the year.

Instructions

(a) Record the above transactions for the year ended January 31, 2016, including any entries required to close dividends and loss to Retained Earnings.

(b) Open T accounts and post to the shareholders' equity accounts.

(d) Prepare the shareholders' equity section of the statement of financial position at January 31, 2016.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...