Accounting

The charter of the Sanders Corporation authorizes the issuance of 1,500,000 shares of no-par common stock and 500,000 shares of 8 percent, $50 par value, cumulative preferred stock. These events affected shareholders’ equity during the first year of operation:

1. 200,000 shares of common stock were sold for $15 per share.

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2. 40,000 shares of preferred stock were sold at $52 per share.

3. A building with a fair market value of $560,000 was acquired for a cash payment of $150,000 and 17,000 shares of common stock.

4. 30,000 shares of common stock were issued for $690,000 cash.

5. A dividend of $1 per share for common and $4 per share for preferred stock was declared.

Required:

A. Record the transactions just described.

B. Prepare the shareholders’ equity section of the balance sheet for December 31 assuming that Sanders generated $945,000 of income.

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