Accounts Problem 11-2A Lawn Corporation, a publicly traded company, was organize

Question

Accounts

Problem 11-2A Lawn Corporation, a publicly traded company, was organized on January 1, 2018. It is authorized to issue an unlimited number of $3 noncumulative preferred shares and an unlimited number of common shares. The following share transactions were completed during the company's first year of operations Jan. 10 Issued 1,000,000 common shares for $2 per share Mar 1 Issued 20,000 preferred shares for $50 per share. May Issued 250,000 common shares for $3 per share. June Reacquired and retired 9,000 common shares at $2 per share. Determine the average cost of each reacquired share to the nearest cent before recording this transaction, July 24 Issued 35,900 common shares for $109,000 cash and used equipment. The equipment originally cost $30,000. It now has a carrying amount of $15,000 and a current value of s16,100. The common shares were trading for $4 per share on this date. Sept. 4 Issued 10,000 common shares for $5 per share Nov. 1Issued 4,300 preferred shares for $50 per share. 20 Reacquired and retired 16,000 common shares at $4 per share. Determine the average cost of each reacquired share to the nearest cent before recording this transaction 14 31 Dec. Declared a $65,000 cash dividend to the preferred shareholders, to shareholders of record on December 31, payable on January 10.

Explanation / Answer

Date Particulars Debit Credit 10-Jan Cash $ 2,000,000.00 Common Stock $ 2,000,000.00 (shares issued on premium) 1-Mar Cash $ 1,000,000.00 Preferred Stock $        60,000.00 Premium on Shares $      940,000.00 (Shares issued recorded) 1-May Cash $      750,000.00 Common Stock $      750,000.00 (Shares issued recorded) 1-Jun Treasury Stock $        19,800.00 Cash $        18,000.00 APIC - Treasury Stock $          1,800.00 (Shares repurchased) 24-Jul Cash $      109,000.00 Equipment $        16,100.00 Common Stock $      125,100.00 (Equipment purchased) 4-Sep Cash $        50,000.00 Common Stock $        50,000.00 (Shares issued recorded) 1-Nov Cash $      215,000.00 Preferred Stock $        12,900.00 Contributed Surplus $      202,100.00 (Shares issued recorded) 20-Nov Treasury Stock $        35,520.00 Retained Earnings $        28,480.00 Cash $        64,000.00 (Shares repurchased) 14-Dec Retained Earnings $        65,000.00 Preferred Div Payable $        65,000.00 (Preferred dividend declared recorded) 31-Dec Income Summary $ 1,200,000.00 Retained Earnings $ 1,200,000.00 (Income transferred to retained earnings)

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