Lighthouse Company Ltd. just hired you to do their corporate accounting. They are authorized to issue...

 

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Lighthouse Company Ltd. just hired you to do their corporate accounting. They are authorized to issue 100,000 $4 preferred shares. The company can issue unlimited common shares, and has 57,000 common shares outstanding worth $257,500 and no preferred shares issued. Currently, the opening retained earnings equals $294,000. Jan. 22 Lighthouse Company Ltd. issued 2,000 common shares in exchange for land valued at $69,000. (2 marks) Feb. 10 To distribute earnings to shareholders, the board of directors declared a 5% share dividend to shareholders of record on Mar. 4, to be distributed on Mar. 19. The shares trade for $7 a share. (6 marks) Mar. 19 Issued the share dividend. Apr. 10 Sold and issued 14,000 preferred shares for cash at $22 per share. (2.5 marks) May 25 The board declared total cash dividends of $70,000 to shareholders of record on May 17, payable on Jun. 4. (7 marks) Jun. 4 Paid the cash dividend. Dec. 31 Lighthouse Company Ltd. earned a net income of $333,000 for the year. Close out the income summary account and any other temporary equity accounts. (3.5 marks) REQUIRED: 1) Journalize the above entries. (21 marks) 2) Prepare a statement of changes in equity for 2022. (6 marks) 3) Prepare the balance sheet presentation of the equity section as at December 31, 2022. (5 marks) Lighthouse Company Ltd. just hired you to do their corporate accounting. They are authorized to issue 100,000 $4 preferred shares. The company can issue unlimited common shares, and has 57,000 common shares outstanding worth $257,500 and no preferred shares issued. Currently, the opening retained earnings equals $294,000. Jan. 22 Lighthouse Company Ltd. issued 2,000 common shares in exchange for land valued at $69,000. (2 marks) Feb. 10 To distribute earnings to shareholders, the board of directors declared a 5% share dividend to shareholders of record on Mar. 4, to be distributed on Mar. 19. The shares trade for $7 a share. (6 marks) Mar. 19 Issued the share dividend. Apr. 10 Sold and issued 14,000 preferred shares for cash at $22 per share. (2.5 marks) May 25 The board declared total cash dividends of $70,000 to shareholders of record on May 17, payable on Jun. 4. (7 marks) Jun. 4 Paid the cash dividend. Dec. 31 Lighthouse Company Ltd. earned a net income of $333,000 for the year. Close out the income summary account and any other temporary equity accounts. (3.5 marks) REQUIRED: 1) Journalize the above entries. (21 marks) 2) Prepare a statement of changes in equity for 2022. (6 marks) 3) Prepare the balance sheet presentation of the equity section as at December 31, 2022. (5 marks)

Answer rating: 100% (QA)

Date Debit Credit Jan22 Land 69000 Common shares To record issue of shares n exchange of shares Feb1... View the full answer