Question #1 (33 marks) Jones Consortium Ltd. is authorized to issue up to 200,000 common shares...

 

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Question #1 (33 marks) Jones Consortium Ltd. is authorized to issue up to 200,000 common shares and can issue 100,000 $2 cumulative preferred shares. The company has 37,500 common shares outstanding worth $257,500 and no preferred shares issued. The opening retained earnings balance is $226,000. The following transactions occurred during 2023: Jan. 12 Feb. 20 Mar. 15 Apr. 28 May 18 Jun. 10 Aug. 25 Sep. 1 Dec. 31 Jones Consortium Ltd. issued 6,200 common shares in exchange for vehicles valued at $46,000. (2 marks) The board of directors delcared a 5% share dividend to shareholders of record on Mar. 7, to be distributed on Mar. 15. The shares trade for $4 a share. Issued the share dividend. Sold and issued 12,000 preferred shares for cash at $26 per share. The board declared total cash dividends of $56,000 to shareholders of record on May 19, payable on Jun. 10. Paid the cash dividend. The board decided to split the common shares 2 to 1 effective Sep. 1. Share split (2 to 1) executed. Jones Consortium Ltd. earned a net income of $264,000 for the year. Close out the income summary account and any other temporary equity accounts. REQUIRED: 1) What are the journal entries needed to record the transactions from above? (23 marks) 2) Prepare a statement of changes in equity for the year ended 2023. (6 marks) 3) Prepare the equity section as it would be presented in the balance sheet as at December 31, 2023. (4 marks) Question #1 (33 marks) Jones Consortium Ltd. is authorized to issue up to 200,000 common shares and can issue 100,000 $2 cumulative preferred shares. The company has 37,500 common shares outstanding worth $257,500 and no preferred shares issued. The opening retained earnings balance is $226,000. The following transactions occurred during 2023: Jan. 12 Feb. 20 Mar. 15 Apr. 28 May 18 Jun. 10 Aug. 25 Sep. 1 Dec. 31 Jones Consortium Ltd. issued 6,200 common shares in exchange for vehicles valued at $46,000. (2 marks) The board of directors delcared a 5% share dividend to shareholders of record on Mar. 7, to be distributed on Mar. 15. The shares trade for $4 a share. Issued the share dividend. Sold and issued 12,000 preferred shares for cash at $26 per share. The board declared total cash dividends of $56,000 to shareholders of record on May 19, payable on Jun. 10. Paid the cash dividend. The board decided to split the common shares 2 to 1 effective Sep. 1. Share split (2 to 1) executed. Jones Consortium Ltd. earned a net income of $264,000 for the year. Close out the income summary account and any other temporary equity accounts. REQUIRED: 1) What are the journal entries needed to record the transactions from above? (23 marks) 2) Prepare a statement of changes in equity for the year ended 2023. (6 marks) 3) Prepare the equity section as it would be presented in the balance sheet as at December 31, 2023. (4 marks)

Answer rating: 100% (QA)

1 Journal Entries Calculations Feb 20 Transaction declaration of Share Dividend Share Dividend 5 of ... View the full answer