Question

The following is the Issued Share Capital section of shareholders’ equity for the Larson Corporation of White Rock on June 1, 2013.

Issued Share Capital:
Preferred Shares, no par value, $2 dividend, authorized 20,000 shares, 5,000 shares issued .................$125,000
Common Shares, no par value, authorized 100,000 shares, 20,000 shares issued............ $200,000
Total Issued Share Capital $325,000

The following transactions occurred in the months of June and July 2013:
June 3: Issued 2,000 preferred shares at $28 per share.
June 4: Issued 4,000 common shares at $13 per share.
Jun 14: Issued 5,000 common shares at $16 per share.
July 2: Issued 1,000 preferred shares at $29 per share.
Jul 19: Issued 2,000 common shares in exchange for building and land with a fair market value of $25,000 and $29,000, respectively.

a. Journalize and post the above entries and update the shareholders’ equity ledger accounts provided in the workbook.

b. Prepare a new Share Capital section of shareholders’ equity as of July 31, 2013.

Answer 1

a.

Date	Account title	Debit	Credit
June. 3	Cash (2,000 x$28)	56,000
	Preferred shares		56,000
June. 4	Cash (4,000 x$13)	52,000
	Common shares		52,000
June. 14	Cash (5,000 x$16)	80,000
	Common shares		80,000
July. 2	Cash (1,000 x$29)	29,000
	Preferred shares		29,000
July. 19	Building	25,000
	Land	29,000
	Common stock		54,000

b.

White Rock
Partial balance sheet
As of July 31
Issued share capital:
Preferred shares, no par value, $2 dividend, authorized 20,000 shares, 8,000 shares issued	210,000
Common shares, no par value, authorized 100,000 shares, 31,000 shares issued	386,000
Total issued share capital	596,000