1. Caronport Carpentry Shop Ltd. can issue 90,000 $4 cumulative preferred shares. The company's letters patent...

Transcribed Image Text:

1. Caronport Carpentry Shop Ltd. can issue 90,000 $4 cumulative preferred shares. The company's letters patent authorizes up to 700,000 common shares, and the corporation has 69,000 common shares outstanding with a book value of $254,000. Presently, no preferred shares are issued. The opening retained earnings equals $543,700. Jan. 6 Feb. 6 Mar. 25 Apr. 16 May. 25 Jun. 21 Aug. 5 Dec. 31 Caronport Carpentry Shop Ltd. Issued 4,500 common shares in exchange for land worth $48,000. (1 marks) The board of directors delcared a 9% share dividend (market value $4.00/share) to shareholders of record on Mar. 1 (market value $4.75/share) to be distributed on Mar. 25 (market value $5.25/share). (3 marks) Issued the share dividend. (1 mark) Sold and issued 17,000 $4 cumulative preferred shares for cash at $24 per share. (1.5 marks) The Board declared total cash dividends of $115,000 to shareholders of record on May 31, payable on Jun. 21. (3.5 marks) Paid the cash dividend. (1 marks) The board decided to split the common shares 3 to 1, effective the same day. (1 mark) Caronport Carpentry Shop Ltd. Earned a net income of $239,000 for the year. Close out the income summary account and any other temporary equity accounts. (2 marks) REQUIRED: 1) Record the journal entries needed to document the transactions from above. 2) Prepare a statement of changes in equity for the year ended December 31, 2023. (8 marks) 3) Prepare the equity seciton as it would be presented in the balance sheet as at December 31, 2023. (4 marks) 1. Caronport Carpentry Shop Ltd. can issue 90,000 $4 cumulative preferred shares. The company's letters patent authorizes up to 700,000 common shares, and the corporation has 69,000 common shares outstanding with a book value of $254,000. Presently, no preferred shares are issued. The opening retained earnings equals $543,700. Jan. 6 Feb. 6 Mar. 25 Apr. 16 May. 25 Jun. 21 Aug. 5 Dec. 31 Caronport Carpentry Shop Ltd. Issued 4,500 common shares in exchange for land worth $48,000. (1 marks) The board of directors delcared a 9% share dividend (market value $4.00/share) to shareholders of record on Mar. 1 (market value $4.75/share) to be distributed on Mar. 25 (market value $5.25/share). (3 marks) Issued the share dividend. (1 mark) Sold and issued 17,000 $4 cumulative preferred shares for cash at $24 per share. (1.5 marks) The Board declared total cash dividends of $115,000 to shareholders of record on May 31, payable on Jun. 21. (3.5 marks) Paid the cash dividend. (1 marks) The board decided to split the common shares 3 to 1, effective the same day. (1 mark) Caronport Carpentry Shop Ltd. Earned a net income of $239,000 for the year. Close out the income summary account and any other temporary equity accounts. (2 marks) REQUIRED: 1) Record the journal entries needed to document the transactions from above. 2) Prepare a statement of changes in equity for the year ended December 31, 2023. (8 marks) 3) Prepare the equity seciton as it would be presented in the balance sheet as at December 31, 2023. (4 marks)

Answer rating: 100% (QA)

1 Journal Entries For each transactionidentify the accounts affectedtheir debit or credit natureand ... View the full answer