Wetland Corporation, a publicly traded company, was organized on June 1, 2017. It is authorized to issue

Question:

Wetland Corporation, a publicly traded company, was organized on June 1, 2017. It is authorized to issue an unlimited number of $4 cumulative preferred shares and an unlimited number of common shares. The following share transactions were completed during the company's first year of operations:

June 5 Issued 240,000 common shares for $4 per share.

Aug. 21 Issued 15,000 preferred shares for $100 per share.

Sept. 15 Issued 60,000 common shares in exchange for land. The asking price of the land was $300,000 and the current value was $285,000. The common shares were trading for $4.25 per share on this date.

Oct. 20 Reacquired and retired 20,000 common shares for $4 per share.

Nov. 20 Issued 220,000 common shares for $4.95 per share.

Mar. 9 Reacquired and retired 25,000 common shares for $5 per share. Determine the average cost of each reacquired share to the nearest cent before recording this transaction.

Apr. 16 Issued 6,000 preferred shares for $100 per share.

May 15 Declared the annual preferred cash dividend to the preferred shareholders, to shareholders of record on May 30, payable on June 10.

31 Reported net income of $250,000 for the year.

Instructions

(a) Record the above transactions for the year ended May 31, 2018, including any required entries to close dividends declared and net income.

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

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...