Santiago Corp., a publicly traded company, had 2,500 preferred shares issued with a balance of $55,000 and 140,000 common shares issued with a balance of $700,000 at the beginning of the year. The following share transactions occurred during the year:
June 12 Issued 50,000 common shares for $5 per share.
July 11 Issued 1,000 preferred shares for $25 per share.
Oct. 1 Issued 10,000 common shares in exchange for land. The common shares were trading for $6 per share on that date. The fair value of the land was estimated to be $65,000.
Nov. 15 Issued 1,500 preferred shares for $30 per share.
Instructions
(a) Record the above transactions.
(b) Calculate the average cost (rounded to the nearest cent) for each of the preferred and common shares.