Prepare the shareholders equity section

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Question - Sampson Corporation was organized this year to operate a financial consulting business. The charter authorized the issue of 20,000 common shares. During the first year, the following selected transactions were completed:

1. Sold and issued 6,800 common shares for cash at $24 per share.

2. Sold and issued 680 common shares for a piece of land to be used for a facilities site; construction began immediately. Assume the land was appraised at $16,320 and that the market price per share was $24 on the date of issuance. Debit the land account.

3. Sold and issued 1,200 common shares for cash at $25 per share.

4. At year-end, the statement of earnings showed a loss of $9,000. Because a loss was incurred, no income tax expense was recorded.

Required -

1. Prepare the journal entry required for each of these transactions.

2. Prepare the shareholders' equity section as it should be reported on the statement of financial position at the end of the year.

3. Can Sampson pay dividends at year-end?

Reference no: EM133094698

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