Question $3$ Journal Entries and Shareholders$$ Equity $(15$ marks$)$

Talize Inc. has the following balances at December $31,2014,$ its year end:

Preferred Shares, $$4\mathrm{.}25$ cumulative $($dividends in arrears for $2013$ and $2014)$ $$1,250,000$

$100,000$ shares authorized, $25,000$ issues and outstanding

Common Shares, unlimited authorized, $2,500,000$ shares outstanding $4,500,000$

Retained Earnings $5,000,000$

During $2015$:

Jan $2$ Issued $20,000$ common shares in exchange for machinery fair valued at $$40,000.$

The common shares had a market value of $$1\mathrm{.}80$ per share

May $5$ All required dividends were declared on preferred shares and a $$\mathrm{.}20$ common share cash dividend was declared on common. Dividends will be distributed on Jan $22016.$ Separate both share classes.

July $15$ Retired $5,000$ preferred shares at $$58$ per share

Sept $25$ Talize issued $2,000$ preferred shares and $1,000$ common shares to an investor for $$100,000.$ At the issue date, the market value of the preferred shares was $$45$ per share and the market value of the common shares was $$6$ per share

Oct $31$ Talize declared and issued a $5\%$ share dividend on the common shares. The market value of the shares at declaration date was $$3\mathrm{.}00$ per share

Required:

$1.$ Journalize all the transactions for $2015$

$2.$ Prepare, in good form, the Shareholders$$ Equity section of the balance sheet at its year end, December $31,2015.$ Net income for $2015$ was $$520,000.$ Total comprehensive income for $2015$ was $$650,000$ which includes net income plus a gain of $$130,000$ of foreign exchange gains caused by foreign subsidiary. Use a proper three$-$line title.