Question

The shareholders’ equity accounts of Gennar Inc. at January 2, 2014, are as follows:
Preferred shares, no par value, cumulative, 4,000 shares issued ..... $ 200,000
Common shares, no par value, 125,000 shares issued ......... 2,500,000
Retained earnings ....................... 1,600,000
The following transactions occurred during the year:
March 10 Purchased a building for $ 3,000,000. The seller agreed to receive 20,000 preferred shares and 15,000 common shares of Gennar in exchange for the building. The preferred shares were trading in the market at $ 50 per share on that day.
July 1 Declared a semi-annual cash dividend of $ 1.00 per common share and the required amount of dividends on preferred shares, payable on August 1, 2014, to shareholders of record on July 21, 2014. The annual dividend of $ 2 per preferred share had not been paid in either 2013 or 2014.
August 1 Paid the cash dividend declared on July 1 to both common and preferred shareholders.
December 31 Determined that net earnings for the year were $ 385,000.
Required:
1. Prepare journal entries to record the above transactions.
2. Prepare the shareholders’ equity section of Gennar’s statement of financial position as at December 31, 2014.


$1.99
Sales3
Views85
Comments0
  • CreatedAugust 04, 2015
  • Files Included
Post your question
5000