Problem 11-2A Remmers Corporation, a publicly traded company, was organized on J
ID: 2585854 • Letter: P
Question
Problem 11-2A Remmers Corporation, a publicly traded company, was organized on January 1, 2015. It is authorized to issue an unlimited number of $4 noncumulative preferred shares and an unlimited number of common shares. The following share transactions were completed during the company's first year of operations: Jan. 10 Issued 516,000 common shares for $2 per share Mar. 1 Issued 14,900 preferred shares for $51 per share May 1Issued 58,000 common shares for $3 per share July 24 Issued 16,600 common shares for $68,970 cash and used equipment. The equipment originally cost $15,170. It now has a carrying amount of $7,990 and a fair value of $8,570. The common shares were trading for $4 per share on this date Sept. 1 Issued 4,450 common shares for $4 per share Nov. 1Issued 2,620 preferred shares for $52 per share Dec. 15 Declared a $36,500 dividend to the preferred shareholders, to shareholders of record on December 31, payable on January 10 31 Reported profit of $650,900 for the year Record the above transactions for 2015, including any required closing entries to close dividends and profit to Retained Earnings. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Transaction entries:Explanation / Answer
Note: The equipment has been recorded at its fair value since the same is available.
Date Account Titles and Explanation Debit Credit Jan. 10 Cash (516000 x $2) 1032000 Common shares 1032000 (To record issue of common shares) Mar. 1 Cash (14900 x $51) 759900 Preferred shares 759900 (To record issue of preferred shares) May. 1 Cash (58000 x $3) 174000 Common shares 174000 (To record issue of common shares) Jul. 24 Cash 68970 Equipment 8570 Common shares 77540 (To record issue of common shares) Sep. 1 Cash (4450 x $4) 17800 Common shares 17800 (To record issue of common shares) Nov. 1 Cash (2620 x $52) 136240 Preferred shares 136240 (To record issue of preferred shares) Dec. 15 Cash dividends 36500 Cash dividends payable 36500 (To record declaration of preferred dividends) Closing entries: Dec. 31 Retained earnings 36500 Cash dividends 36500 (To close cash dividends) Dec. 31 Income summary 650900 Retained earnings 650900 (To close profit)