9) Northern Kings Ltd. (NKL) began operations on January 1, 2021. The company's charter authorized the...

 

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9) Northern Kings Ltd. (NKL) began operations on January 1, 2021. The company's charter authorized the following share capital: Preferred shares: 6%, $20 par value, authorized 20,000 shares Common shares: no par value, authorized 300,000 shares During 2021 NKL had the following transactions (in the order they are listed): Sold and issued 30,000 common shares to each of the four owners. Collected $10 cash per share from three of the owners. The fourth owner contributed land and building in lieu of cash for his shares. Assume that 60% of the non-cash payment received from the fourth owner applies to the land. All shares were issued immediately. Sold and issued 4,000 preferred shares at $20 per share and 5,000 common shares at $11 to the general public. Collected cash and issued the shares immediately. Sold an additional 2,500 common shares to the public for $12.50 per share. Shares were issued immediately. Required (23 marks): a) Prepare the journal entries to record the above transactions. b) Assuming that NKL has retained earnings of $88,000 at the end of 2021 after the revenue and expense accounts have been closed prepare the shareholders' equity section of the statement of financial position for NKL. (Hint: look at the demonstration case at the end of the chapter) 9) Northern Kings Ltd. (NKL) began operations on January 1, 2021. The company's charter authorized the following share capital: Preferred shares: 6%, $20 par value, authorized 20,000 shares Common shares: no par value, authorized 300,000 shares During 2021 NKL had the following transactions (in the order they are listed): Sold and issued 30,000 common shares to each of the four owners. Collected $10 cash per share from three of the owners. The fourth owner contributed land and building in lieu of cash for his shares. Assume that 60% of the non-cash payment received from the fourth owner applies to the land. All shares were issued immediately. Sold and issued 4,000 preferred shares at $20 per share and 5,000 common shares at $11 to the general public. Collected cash and issued the shares immediately. Sold an additional 2,500 common shares to the public for $12.50 per share. Shares were issued immediately. Required (23 marks): a) Prepare the journal entries to record the above transactions. b) Assuming that NKL has retained earnings of $88,000 at the end of 2021 after the revenue and expense accounts have been closed prepare the shareholders' equity section of the statement of financial position for NKL. (Hint: look at the demonstration case at the end of the chapter)

Answer rating: 100% (QA)

Ans a Date General Journal Debit Credit 1 Cash ac30000310 900000 Land ac300001060 18... View the full answer