This problem continues the Canyon Canoe Company situation from Chapter 12. Amber Wilson, owner of Canyon Canoe Company, decides to start a new company that will be operated as a corporation, Outdoor Equipment Incorporated (OEI). This company will sell outdoor clothing and equipment.
Canyon Canoe Company had the following select transactions in 2021:
Jan. 1 Issued 50,000 shares of $1 par value common stock for a total of $200,000.
10 Issued 20,000 shares of 4%, $3 par value preferred stock in exchange for land with a market value of $70,000.
Dec. 15 Declared total cash dividends of $15,000.
20 Declared an 8% common stock dividend when the market value of the stock was $4.50 per share.
31 Paid the cash dividends.
31 Distributed the stock dividend.
Requirements
1. Journalize the transactions.
2. Calculate the balance in Retained Earnings on December 31, 2021. Assume net income for the year was $417,000.
3. Prepare the stockholders' equity section of the balance sheet as of December 31, 2021?