Question

Richetti Corporation, a publicly traded company, is authorized to issue 219,000 $4 cumulative preferred shares and an unlimited number of common shares. On January 1, 2018, the general ledger contained the following shareholders' equity accounts: Preferred shares (8,600 shares issued) $473,000 Common shares (72,800 shares issued) 1,092,000 Contributed surplus 24,300 Retained earnings 788,000 Accumulated other comprehensive income 10,400 The following equity transactions occurred in 2018: Feb. 6 Issued 9,200 preferred shares for $561,200. Apr. 6 Issued 20,800 common shares for $592,800. 27 Reacquired and retired 3,300 common shares at $17 per share. May 29 Declared a semi-annual cash dividend to the preferred shareholders of record at June 12, payable July 1. Aug. 22 Issued 9,000 common shares in exchange for a building. At the time of the exchange, the building was valued at $178,000 and the common shares at $ 163,000. Dec. 14 The board of directors decided there were insufficient funds to declare the semi-annual dividend to the preferred shareholders. 31 Net income for the year was $561,000.

Answer 1

Date	Particulars	Debit Amount	Credit Amount
01-02-2018	Cash	561200.00 Dr
	Preference Share Capital		561200.00
06-04-2018	Cash	592800.00 Dr
	Common Share		592800.00
27-04-2018	Common Share	59400.00
	Contributed Surplus		3300.00 Cr
	Cash		56100.00 Cr
29-05-2018	Dividend Declared	17200.00
	Dividend Payable		17200.00 Cr
01-07-2018	Dividend Payable	17200.00
	Cash		17200.00 Cr
29-08-2018	Building	178000.00
	Common share		163000.00 Cr
	contributed surplus		15000.00 Cr
31-12-2018	P&L Ac	561000
	Other income		561000.00 Cr
31-12-2018	Accumulated Other Income	571400.00
	Dividend Declared		17200
	Retained Earnings		554200

	Preferred Shares
Date	No.of Shares	Par Value	Total
01/01/2018	8600	55	473000
06/02/2018	9200	61	561200
As on 31/12/2018	17800		1034200
	common Shares
Date	No.of Shares	Par Value	Total
01/01/2018	72800	15.08242	1098000
06/02/2018	20800	28.5	592800
27/04/2018	-3300	-17	-59400
22/08/2018	9000	18.11111	163000
As on 31/12/2018	99300		1794400
	Retained Earning
01/01/2018			788000
31/12/2018	other income		571400
Less	Dividend		-17200
As on 31/12/2018			1342200
	Contributed Surplus
01/01/2018	Opening balance		24300
27/04/2018	Common share		3300
22-Aug	Common share		15000
As on 31/12/2018			42600

Accumulated income

Particulars		Debit	Credit
Dr	Opening Balance		10400.00
Dr	Profit & Loss A/c		561000.00
Cr	Dividend Declared	571400.00

Dividend Declared
Ledger Account
1-Dec-2018 to 31-Dec-2018
Date	Particulars		Debit	Credit
01-12-2018	Cr	Opening Balance	17200.00
31-12-2018	Dr	(as per details)		17200.00
		Accumulated Other Income	571400.00 Dr
		Retained Earnings		554200.00 Cr
		17200.00		17200.00