Ujjal Corporation, a publicly traded company, is authorized to issue an unlimited number of $5 noncumulative preferred shares and an unlimited number of common shares. On February 1, 2018, the general ledger contained the following shareholders' equity accounts:
Preferred shares (44,000 shares issued).......................$ 440,000
Common shares (70,000 shares issued).......................1,050,000
Contributed surplus..........................................................75,000
Retained earnings........................................................1,000,000
Accumulated other comprehensive income......................65,000
The following equity transactions occurred during the year ended January 31, 2019:
Feb. 28 Issued 1,500 preferred shares for $150,000.
Apr. 11 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.
Nov. 26 Reacquired and retired 10,000 common shares for $24 each. Determine the average cost of each reacquired share to the nearest cent before recording this transaction.
Dec. 31 Declared a $2.50 per share cash dividend to the preferred shareholders of record at January 15, payable February 1.
Jan. 31 Incurred a net loss of $5,000 for the year.
Instructions
(a) Record the above transactions for the year ended January 31, 2019, including any entries required to close dividends declared and net loss.
(b) Open T accounts and post to the shareholders' equity accounts.
(c) Prepare the statement of changes in equity for the year.
(d) Prepare the shareholders' equity section of the statement of financial position at January 31, 2019.