On 2 January 20X1, Potter Corp was incorporated in the Province of Ontario. It was authorized...

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On 2 January 20X1, Potter Corp was incorporated in the Province of Ontario. It was authorized to issue an unlimited number of no-par value common shares, and 10,000 share of no-par $7, cumulative and nonparticipating preferred shares. During 20X1 the firm completed the following transactions: 8-Jan Accepted subscriptions for 30,000 common shares at $13 per share. Down payment on the subscribed shares totalled $160,000. 30-Jan Issued 4,500 preferred shares in exchange for the following assets: machinery with a fair market value of $37,000, a factory with a fair market value of $120,000, and land with an appriased value of $275,000 15-Mar Machinery with a fair market value of $56,000 as dontaed to the company 25-Apr Collected the balance of the subscriptions receivable and issued common shares 30-Jun Purchased 2,3000 common shares at $17 per share. The shares were retired. 31-Dec Closed the income summary to retained earnings. The income for the period was $199,000. 31-Dec Declared sufficient cash dividends to allow a $0.95 per share dividend for outstanding common shares. The dividend is payable on 10 January 20X2 to shareholders of record on 5 January 20X2. Prepare the journal entries to record the above transactions. Prepare a multicolumn statement of changes in equity that explains the change in each equity account. Prepare the shareholders' equity section of the SFP for Potter at 31 December 20X1. On 2 January 20X1, Potter Corp was incorporated in the Province of Ontario. It was authorized to issue an unlimited number of no-par value common shares, and 10,000 share of no-par $7, cumulative and nonparticipating preferred shares. During 20X1 the firm completed the following transactions: 8-Jan Accepted subscriptions for 30,000 common shares at $13 per share. Down payment on the subscribed shares totalled $160,000. 30-Jan Issued 4,500 preferred shares in exchange for the following assets: machinery with a fair market value of $37,000, a factory with a fair market value of $120,000, and land with an appriased value of $275,000 15-Mar Machinery with a fair market value of $56,000 as dontaed to the company 25-Apr Collected the balance of the subscriptions receivable and issued common shares 30-Jun Purchased 2,3000 common shares at $17 per share. The shares were retired. 31-Dec Closed the income summary to retained earnings. The income for the period was $199,000. 31-Dec Declared sufficient cash dividends to allow a $0.95 per share dividend for outstanding common shares. The dividend is payable on 10 January 20X2 to shareholders of record on 5 January 20X2. Prepare the journal entries to record the above transactions. Prepare a multicolumn statement of changes in equity that explains the change in each equity account. Prepare the shareholders' equity section of the SFP for Potter at 31 December 20X1.

Answer rating: 100% (QA)

1 Journal Entries 8Jan Cash 30000 shares 13 per share 160000 down payment 350000 Common Shares Subsc... View the full answer