A-1 Networking Solutions Inc. began operations on January 1, 2017, and immediately issued its shares, receiving cash. A-1's balance sheet at December 31, 2017, reported the following shareholders' equity:
Common shares............................................................................... $253,500
Retained earnings................................................................................ 38,000
Total shareholders' equity................................................................ $291,500
During 2017, A-1:
a. Issued 50,000 common shares for $5 per share.
b. Issued common shares for $7 each.
c. Earned net income of $56,000 and declared and paid cash dividends. Revenues were
$171,000 and expenses totalled $115,000.
Requirement
Journalize all A-1's shareholders' equity transactions during the year. A-1's entry in part (c) to close net income to Retained Earnings was:
Revenues........................................................................... 171,000
Expenses.......................................................................................... 115,000
Retained Earnings......................................................................... 56,000