On January 2, 2011, Blueman Corporation was incorporated in theprovince of Ontario. It was authorized to issue an unlimited numberof no-par value common shares, and 25,000 shares of no-par, $8,cumulative and non-participating preferred. During2011, the firm completed the following transactions:
Jan8 Accepted subscriptionsfor 34,000 common shares at $12 per share. Down payment received onthe subscribed shares was 50%.
Jan 30 Issued 10,000 preferred shares in exchange for the followingassets: machinery with a fair market value of $50,000, a factorywith a fair market value of $200,000, and land with an appraisedvalue of $120,000.
Mar 15 Machinery with a fairmarket value of $85,000 was donated to the company.
Apr 25 Collected the balance of the subscriptions receivable on only30,000 shares and issued common shares. A customer defaulted on thelast payment on a subscription for 4,000 shares. The company policyis to issue the proportion paid up to date for customers thatdefault.
June 30 Purchased2,200 common shares at $18 per share. The shares were retired.
Dec 31 Declared sufficient cash dividends to allow a $1 per share dividendfor outstanding common shares. The dividend is payable onJanuary 10, 2012, to shareholders of record on January 5,2012.
Dec 31 Closedthe income summary to retained earnings. The income for the periodwas $225,000.
Required:
- ( Prepare the journal entries to record the abovetransactions.
- (Prepare the shareholders’ equity section of thebalance sheet for Blueman Corporation at December 31,2011.
