Question

Current Attempt in Progress Aloue Corp., a publicly traded company, had 2,800 preferred shares issued with a balance of $58,800 and 127,000 common shares issued with a balance of $635,000 at the beginning of the year. The following share transactions occurred during the year: June Issued 49,500 common shares for $6 per share. 12 July Issued 1,000 preferred shares for $25 per share. 11 Oct. 1 Issued 9,400 common shares in exchange for land. The common shares were trading for $7 per share on that date. The fair value of the land was estimated to be $70,600. Nov. Issued 27,000 preferred shares for $28 per share. 15

Answer 1

Part 1

	Number of shares	Balance in accounts
(1) Preferred shares	30,800	$ 839,800
(2) Common shares	185,900	$ 1,002,600

Working note:

	Preferred shares	Common shares
Number of shares	2,800	127,000
June. 12		49,500
July. 11	1,000
Oct. 1		9,400
Nov. 15	27,000
Total no. of shares	30,800	185,900
Balance in accounts	$ 58,800	$ 635,000
June. 12		$ 297,000
July. 11	$ 25,000
Oct. 1		$ 70,600
Nov. 15	$ 756,000
Total balance in accounts	$ 839,800	$ 1,002,600

Part 2:

Date	Account title	Debit	Credit
Apr. 2	Cash	108,000
	Common shares		108,000
		78,400
June, 15	Dividends declared (73,000+5,400)x$0.15	11,760
	Dividends payable		11,760
July, 10	Dividend payable	11,760
	Cash		11,760
Aug. 21	Dividends declared (73,000+5,400)x5%x$23	90,160
	Stock dividends distributable		90,160
Sept. 20	Stock dividends distributable	90,160
	Common shares		90,160
Nov. 1	Cash	79,200
	Common shares		79,200
Dec. 20	Dividends declared (85,620x$0.20)	17,124
	Dividend payable		17,124
	Working:
	73,000+5,400 = 78,400
	78,400x5% = 3,920
	Outstanding shares on Dec. 20 = 78,400+3,920+3,300=85,620