Redfern Limited reported the following information in its December 31, 2013, annual report:
Shareholders' Equity
Preferred shares, $2.75, cumulative;
600,000 shares authorized; 100,000 shares issued and outstanding...................$ 400,000
Common shares, unlimited number of shares
authorized, 1,300,000 shares issued and outstanding....................................1,850,000
Retained earnings............................................................................,5,850,000
Total shareholders' equity..................................................................$8,100,000
Required
1. Identify the different issues of shares that Redfern Limited has outstanding.
2. What is the average issue price per preferred share?
3. Make two summary journal entries to record issuance of all the Redfern shares for cash. Explanations are not required.
4. Assume no preferred dividends are in arrears. Journalize the declaration of a $400,000 dividend at June 30, 2014. Use separate Dividends Payable accounts for preferred and common shares. An explanation is not required.