Solve the Statement of Changes in Shareholder's Equity

The post-closing trial balance of Sunland Corporation at December 31, 2021, contains the following shareholders' equity accounts: $5 noncumulative preferred shares (9,800 issued) Common shares (408,400 issued) Retained earnings $1,078,000 2,045,600 3,160,600 A review of the accounting records reveals the following: 1. 2. 3. The January 1, 2021, balance in Preferred Shares was $1,078,000, Common Shares was $1,308,000 (327,000 shares), the balance in Contributed Surplus-Reacquisition of Common Shares was $32,400, and the balance in Retained Earnings was $2,448,000 One of the company's shareholders needed cash for a personal expenditure. On January 15, the company agreed to reacquire 21,600 shares from this shareholder for $7 per share. On July 1, the company corrected a prior period error that resulted in an increase to the Long-Term Investment account, as well as to the prior year's profit of $258,000 before income tax. On October 1, 103,000 common shares were sold for $8 per share. The preferred shareholders' dividend was declared and paid in 2021 for two quarters. Due to a cash shortage, the last two quarters' dividends were not declared or paid. Profit for the year before income tax was $768,000. The company has a 25% income tax rate. 4. 5. 6. Prepare journal entries to record transactions (2) to (5) and post to general ledger accounts. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Record journal entries in the order presented in the problem.) ate Account Titles and Explanation Debit Credit Jan. 15 Common Shares 86,400 Contributed Surplus - Reacquisition of Common Shares 32.400 Retained Earnings 32.400 151,200 Cash (To record reacquisition of common shares.) 31 Cash Dividends - Common 12.250 12.250 Dividends Payable (To record cash dividend.) 30 Cash Dividends - Common 12.250 12.250 Dividends Payable (To record cash dividend.) Long-Term Investments 258.000 Income Tax Payable 64.500 193.500 Retained Earnings (To record correction of error.) 1 Cash 824.000 Common Shares 824.000 (Issued common shares for cash.) Preferred Shares Debit Ref. Credit Balance Date Explanation Jan. Balance 1 1,078,000 Common Shares Ref. Debit Credit Balance 1,308,000 Date Explanation Jan. Balance 1 Jan. Reacquisition of 15 shares Oct. Issue of shares 1 J1 86,400 1.221.600 J1 824.000 2.045,600 Contributed Surplus-Reacquisition of Common Shares Ref. Debit Credit Balance Balance 32,400 Date Explanation Jan. 1 Jan. Reacquisition of 15 shares J1 32.400 0 Retained Earnings Debit Ref. Credit Balance V 2,448,000 Date Explanation Jan. Balance 1 Jan. Reacquisition of 15 shares July Prior period 1 error J1 32.400 2.415.600 J1 193,500 2.609.100 Prepare entries to close dividends and the Income Summary account and post. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Debit Credit 576.000 576,000 Date Account Titles and Explanation Dec. 31 Income Summary Retained Earnings (To close Income Summary.) Dec. Retained Earnings 31 Cash Dividends - Common (To close dividends to retained earnings.) 24500 24500 Preferred Shares Debit Ref. Credit Date Explanation Jan. 1 Balance Balance 1,078,000 Common Shares Debit Ref. Credit Balance 1,308,000 Date Explanation Jan. 1 Balance Jan. Reacquisition of 15 shares Oct. 1 Issue of shares J1 86,400 1,221,600 J1 824,000 2,045,600 Contributed Surplus-Reacquisition of Common Shares Ref. Debit Credit Balance 32,400 Date Explanation Jan. 1 Balance Jan. Reacquisition of 15 shares J1 0 32,400 Retained Earnings Debit Ref. Credit Balance 2,448,000 2,415,600 J1 32,400 Date Explanation Jan. 1 Balance Jan. Reacquisition of 15 shares Prior period July 1 error Dec. Income 31 Summary Dec. Dividends 31 J1 193,500 2,609,100 J1 576.000 3.185.100 J1 24500 3.160,600 eTextbook and Media List of Accounts Prepare a statement of changes in shareholders' equity for the year. (Enter negative amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). List variable costs before fixed costs.) SUNLAND CORPORATION Statement of Changes in Shareholders' Equity Preferred Shares Common Shares Contributed Surplus- Reacquisition of Common Shares $ $ $ Balance January 1, as previously reported Correction for understatement of investment, net of $64,500 income tax expense Balance January 1, as adjusted Issued for cash Reacquired shares Cash dividends -preferred Profit Balance, December 31 $ $ $ eTextbook and Media List of Accounts Prepare a statement of changes in shareholders' equity for the year. (Enter negative amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). List variable costs before fixed costs.) SUNLAND CORPORATION Statement of Changes in Shareholders' Equity Common Shares Contributed Surplus- Reacquisition of Common Shares Retained Earnings Total $ $ $ TA $ TA eTextbook and Media List of Accounts