Question

You are provided with the following information from the equity section of Aurora Ltd.'s balance sheet on December 31, 2017:
Preferred stock-Authorized, 200,000 shares; outstanding 60,000 shares... $1,500,000
Common shares-Authorized, unlimited; outstanding 400,000 shares.... 1,200,000
Retained earnings....................... 9,110,000
During the year ended December 31, 2018 the following occurred (events are listed in the order they occurred during the year):
i. Semi-annual dividend on common shares of $0.50 per share was declared and paid.
ii. 100,000 shares of common shares were issued for $30 per share.
iii. 20,000 shares of preferred shares were issued for $50 per share.
iv. 20,000 shares of common shares were issued in exchange for patent. The shares traded for the patent had a fair value on the date of the transaction of $380,000.
v. Preferred dividends were declared and paid, $2.50 per share.
vi. 10 percent stock dividend was declared on the outstanding common shares.
vii. Semi-annual dividend on common shares of $0.50 per share was declared. The dividend will be paid in January 2019.
viii. Net income was $1,250,000.

Required:
a. Prepare the journal entries required to record the above events.
b. Prepare the shareholders' equity section of Aurora balance sheet on December 31, 2018.



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  • CreatedFebruary 26, 2015
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