Question D $(7$ marks; $13$ minutes$)$

ML$|$W Limited was incorporated on January $1,2020$ with the following share capital:

Preferred shares, no par value, cumulative, $$1$ annual dividend, unlimited number of shares authorized

Common shares, no par value, unlimited number of shares authorized

The following events occurred during the year $2022$:

Jan. $2$ Issued $50,000$ common shares for cash, $$100,000.$

Jan. $2$ Issued $5,000$ preferred shares to a supplier in exchange for used equipment. The original cost of

the equipment to the supplier was $$250,000$ and its accumulated depreciation was $$150,000$ up to

the date of sale. The market value of this equipment was $$125,000$ on that date.

Sept. $15$ Repurchased and cancelled $5,000$ common shares through an open market purchase, paying

$$9,000.$

Dec. $31$ Declared the required dividend on preferred shares and a cash dividend of $$0\mathrm{.}30$ per common

share outstanding. Both dividends are payable on January $15,2023.$

The company reported net earnings of $$40,000$ for the year $2022.$

Required:

Prepare all the journal entries to record the transactions that occurred on January $2$ and September $15.$

$(5$ marks$)$

Determine the change in retained earnings for the year $2022$ based on the available information. $(2$

marks$)$