Question

Please help me doing a) and b). Get stuck in Jan 31 (the first one of income summary)

30 W WU Was Owed $100,000. Te duard of directors declared a cash dividend of $15,000 on the preferred shares and $5,000 on the common shares to shareholders of record on June 20, payable July 1. Dedee that you will shechilder 150,000 common shares were issued in exchange for machinery with a fair market value of $2,000,000. The shares were actively trading on this date at $13.20 per share. Use the value of ta shere to look (.10) The dividends declared on June 18 were paid. July 1 Pay the money to shareholder Lindsay Ltd. was authorized to issue an unlimited number of common shares. During January 2021 its first month of operations, the following selected transactions occurred: Jan. / 1 5 15 W 20 1,000 shares were issued to the organizers of the corporation. The total value of the shares was determined to be $8,000. 15,000 shares were sold to various shareholders for $9.00 each. The board of directors declared a cash dividend of $0.50 per common share to shareholders of record on fanta19 payable January 31. 4,000 shares were issued in exchange for land valued at $32,000, The shares were actively trading on this date at $10.75 per share. Closed the Income Summary account, which showed a credit balance of $110,000 Net income Paid the dividends declared on January 19. 4,000 S Required a. Journalize the above transactions. b. Prepare the shareholders' equity section of the balance sheet of Lindsay Ltd, at January 31, 2021 16 Cush Profford shoe 1,980,000 o Accents Payabh Machenery an

Answer 1

Requirement a:

Date	Account title and explanation	Debit	Credit
Jan.1	Organization expense	$8,000
	Common stock		$8,000
	[Issuance of common stock to organizers]
Jan.5	Cash [15,000 x $9.00]	$135,000
	Common stock		$135,000
	[Issuance of common stock]
Jan.15	Retained earnings [16,000 x $0.50]	$8,000
	Dividends payable-common		$8,000
	[Declaration of cash dividends]
Jan.20	Land	$43,000
	Common stock [4,000 x $10.75]		$43,000
	[Issuance of common stock in exchange for Land]
Jan.31	Income summary	$110,000
	Retained earnings		$110,000
	[To close income summary account]
Jan.31	Dividends payable-common	$8,000
	Cash		$8,000
	[Payment of cash dividends]

Calculations:

Total outstanding common share at the time of dividends declared = Issued to organizers + Issued to outsiders

=1,000+15,000

=16,000 shares

Dividends payable = 16,000 x $0.50

=$8,000

Requirement b:

Lindsay Ltd.
Balance Sheet
At December 31,2021
Stockholders' equity:
Common stock	$186,000
Retained earnings	$102,000
Total stockholders' equity	$288,000

Calculations:

Common stock
Issued to organizers	$8,000
Issued to outsiders	$135,000
Issued in exchange of land	$43,000
Balance	$186,000

Retained earnings
Income summary	$110,000
(Less): Dividends	($8,000)
Balance	$102,000