Remmers Corporation, a publicly traded company, was organized on January 1, 2018. It is authorized to issue an unlimited number of $3 noncumulative preferred shares and an unlimited number of common shares. The following share transactions were completed during the company's first year of operations:
Jan. 10 Issued 1,000,000 common shares for $2 per share.
Mar. 1 Issued 20,000 preferred shares for $50 per share.
May 1 Issued 250,000 common shares for $3 per share.
June 1 Reacquired and retired 10,000 common shares at $2 per share. Determine the average cost of each reacquired share to the nearest cent before recording this transaction.
July 24 Issued 33,500 common shares for $120,000 cash and used equipment. The equipment originally cost $30,000. It now has a carrying amount of $15,000 and a current value of $16,000. The common shares were trading for $4 per share on this date.
Sept. 4 Issued 10,000 common shares for $5 per share.
Nov. 1 Issued 4,000 preferred shares for $50 per share.
20 Reacquired and retired 15,000 common shares at $4 per share. Determine the average cost of each reacquired share to the nearest cent before recording this transaction.
Dec. 14 Declared a $72,000 cash dividend to the preferred shareholders, to shareholders of record on December 31, payable on January 10.
31 Reported net income of $1.3 million for the year.
Instructions
(a) Record the above transactions for 2018, including any required entries to close dividends declared and net income.
(b) Open T accounts and post to the shareholders' equity accounts.
(c) Prepare the shareholders' equity section of the statement of financial position at December 31.