Eastwind Corporation manufactures and distributes leisure clothing. The shareholders' equity accounts, with balances on October 1, 2015, the beginning of the fiscal year, are as follows:
$1.50 preferred shares (400,000 shares authorized,
30,000 shares issued and outstanding) . . . . . . . . . . . . . . . . . . . . $1,050,000
Common shares (unlimited shares authorized,
270,000 shares issued and outstanding) . . . . . . . . . . . . . . . . . . . 3,240,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,160,000
Selected transactions completed by Eastwind during the current fiscal year are as follows:
Mar. 1. Declared semiannual dividends on the preferred shares and $0.20 on the common shares to shareholders of record on March 31, payable on April 30. Eastwind does not use a cash dividends account.
Apr. 30. Paid the cash dividends.
Jul. 9. Issued 100,000 common shares at $14 per share.
Aug. 29. Issued an additional 70,000 common shares at $16 per share.
Sep. 1. Declared semiannual dividends on the preferred shares and $0.25 on the common shares to shareholders of record on September 30, payable on October 31.
30. Recorded the closing entry for the income for the year of $1,305,000.
Instructions
1. Journalize the transactions.
2. Prepare the statement of retained earnings for the year ended September 30, 2016.
3. Prepare the shareholders' equity section of the balance sheet as at September 30, 2016.