Miss M’s Dance Studios Ltd. is a public company, and accordingly uses IFRS for financial reporting. The corporate charter authorizes the issue of up to 1 million common shares and 50,000 preferred shares with a $2 dividend. At the beginning of the December 31, 2012 year, the opening account balances indicated that 25,000 common shares had been issued for $4 per share, and no preferred shares had been issued. Opening retained earnings were $365,000. The transactions during the year were as follows: Jan. 15 10,000 common shares issued at $6 per share Feb. 12 2,000 preferred shares issued at $60 per share June 30 Dividend paid on common shares of $1.50 per share Sept. 2 Issued 5,000 common shares in exchange for land valued at $25,000 Oct. 31 Dividends declared and paid on preferred shares of $2 Nov. 15 Purchased and retired 500 preferred shares at $62 per share Dec. 31 Net income reported of $532,000
Instructions
(a). Prepare journal entries to record the transactions above.
(b). Prepare the Statement of Shareholders’ Equity.