Question
In: Accounting
The shareholders’ equity section of Toronto Corporation’s balance sheet at January 1, 2021 included the following:...
The shareholders’ equity section of Toronto Corporation’s balance sheet at January 1, 2021 included the following:
Share capital:
$6 Preferred shares, no par value, unlimited number of shares
authorized, 5,000 shares issued $ 500,000
Common shares, unlimited number of shares authorized,
200,000 shares issued 1,800,000
Total share capital 2,300,000
Retained earnings 475,000
Total shareholders’ equity $2,775,000
Required:
Part A: Record the journal entries required for the following transactions of Trainer Corporation:
(1) Feb 10, 2022: Issued 30,000 common shares for cash at $2.30 per share
(2) July 10, 2022: Issued 1,000 preferred shares for cash at $95.00 per share
Part B: On Nov 1, 2022: The Board of directors declared a cash dividend in the total amount of $151,000 to preferred and common shareholders of record on Nov 30, 2022 payable on Dec 15, 2022. Record any necessary journal entries for the dates listed, making sure to separate amounts pertaining to common and preferred shareholders.
Part C: What are the balances in the following accounts (dollar value only) after closing entries are made on December 31, 2022, assuming that Net income for the year is $140,000.
- Dividends payable
- Preferred shares
- Common shares
- Retained earnings
Solutions
Expert Solution
Part A
| Date | Account Titles | Debit | Credit |
| Feb-10 | Cash | $ 69,000 | |
| Common Shares | $ 69,000 | ||
| Jul-10 | Cash | $ 95,000 | |
| Preferred Shares | $ 95,000 |
Part B
| Date | Account Titles | Debit | Credit |
| Nov-30 | Retained Earnings/Cash Dividend | $ 36,000 | |
| Dividend Payable | $ 36,000 | ||
| (Preferred Dividend) | |||
| Nov-30 | Retained Earnings/Cash Dividend | $ 1,15,000 | |
| Dividend Payable | $ 1,15,000 | ||
| (Common Dividend) | |||
| Dec-15 | Dividend Payable | $ 1,51,000 | |
| Cash | $ 1,51,000 |
Alternative to Nov 30 entry
| Date | Account Titles | Debit | Credit |
| Nov-30 | Cash Dividend, Preferred | $ 36,000 | |
| Cash Dividend, Common | $ 1,15,000 | ||
| Dividend Payable | $ 1,51,000 |
Part C
| Dividend Payable | $ - |
| Preferred Stock | $ 5,95,000 |
| Common Stock | $ 18,69,000 |
| Retained Earnings | $ 4,64,000 |
ekkarill92 answered 1 year agoRelated Solutions
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The shareholders’ equity section of the balance sheet of TNL
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($
in millions)
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$
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Paid-in capital—excess of
par
2,790
Paid-in capital—share
repurchase
1
Retained earnings
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transactions. Prepare the entries for both the purchase and
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The shareholders’ equity section of the balance sheet of TNL Systems Inc. included the following accounts...
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Systems Inc. included the following accounts at December 31,
2020:
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1. During 2021, TNL Systems reacquired shares of its common
stock and later sold shares in two separate transactions. Prepare
the entries for both the purchase and subsequent resale of the
shares...
The shareholders’ equity section of the balance sheet of TNL Systems Inc. included the following accounts...
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Systems Inc. included the following accounts at December 31,
2017:
Shareholders'
Equity
($
in millions)
Common stock, 380
million shares at $1 par
$
380
Paid-in capital—excess of
par
3,040
Paid-in capital—share
repurchase
1
Retained earnings
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Required:
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its common stock and later sold shares in two separate
transactions. Prepare the entries for both the purchase and
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