Williams Manufacturing Inc., was legally incorporated on January 2 2020. Its articles of incorporation granted it...

 

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Williams Manufacturing Inc., was legally incorporated on January 2 2020. Its articles of incorporation granted it the right to issue an unlimited number of common shares and 100,000 shares of $14.40 non-cumulative preferred shares. The following transactions are among those that occurred during the first three years of operations. 2020 Jan 12 Issued 40,000 common shares at $4.80 each 20 Issued 6,000 common shares to promoters who provided legal services that helped to establish the company. These services had a fair value of $36,000. 31 Issued 80,000 common shares in exchange for land, building and equipment, which have fair market values of $360.000, S480.000, and $48,000 respectively. 4 Mar Purchased equipment at a cost of $8,160 cash. This was thought to be a special bargain price. It was felt that at least S10,800 would normally have had to be paid to acquire this equipment. 31 During 2020, the company incurred a loss of Dec S36,000. The Income Summary account was closed. 2021 4 Issued 5,000 preferred shares at $72 per share 31 Jan Dec The Income Summary account was closed. Profit for 2021 was $216,000 2022 Dec '4" The company declared a cash dividend of S0.12 per share on the common shares payable on December 18* and also declared the required dividend on the preferred shares. Paid the dividends declared on December 4" . 18 Profit for the year ended December 31" 2022, was $192,000. The Income Summary and Cash Dividend accounts were closed. 31 Required: 1. Journalize the transactions for the years 2020, 2021 and 2022 2. Prepare the statement of changes in equity for the year ended December 31", 2022 Williams Manufacturing Inc., was legally incorporated on January 2 2020. Its articles of incorporation granted it the right to issue an unlimited number of common shares and 100,000 shares of $14.40 non-cumulative preferred shares. The following transactions are among those that occurred during the first three years of operations. 2020 Jan 12 Issued 40,000 common shares at $4.80 each 20 Issued 6,000 common shares to promoters who provided legal services that helped to establish the company. These services had a fair value of $36,000. 31 Issued 80,000 common shares in exchange for land, building and equipment, which have fair market values of $360.000, S480.000, and $48,000 respectively. 4 Mar Purchased equipment at a cost of $8,160 cash. This was thought to be a special bargain price. It was felt that at least S10,800 would normally have had to be paid to acquire this equipment. 31 During 2020, the company incurred a loss of Dec S36,000. The Income Summary account was closed. 2021 4 Issued 5,000 preferred shares at $72 per share 31 Jan Dec The Income Summary account was closed. Profit for 2021 was $216,000 2022 Dec '4" The company declared a cash dividend of S0.12 per share on the common shares payable on December 18* and also declared the required dividend on the preferred shares. Paid the dividends declared on December 4" . 18 Profit for the year ended December 31" 2022, was $192,000. The Income Summary and Cash Dividend accounts were closed. 31 Required: 1. Journalize the transactions for the years 2020, 2021 and 2022 2. Prepare the statement of changes in equity for the year ended December 31", 2022

Answer rating: 100% (QA)

Date Account Titles Debit Credit 2020 Jan12 Cash 192000 40000480 Common Stock 192000 Issued 40000 co... View the full answer