Reference no: EM132553824

Transactions of Ayayai Corporation are as follows.

1. The company is granted a charter that authorizes the issuance of 150,000 preferred shares and an unlimited number of common shares.

2. The founders of the corporation are issued 8,000 common shares for land valued by the board of directors at $192,000 (based on an independent valuation).

3. Sold 15,500 preferred shares for cash at $105 per share.

4. Repurchased and cancelled 3,500 shares of outstanding preferred shares for cash at $95 per share.

5. Paid $90,000 in dividends that were declared in the previous period.

6. Repurchased for cash and cancelled 600 shares of the outstanding common shares issued in item 2 above at $43 per share.

7. Issued 1,800 preferred shares at $99 per share.

Question 1: Prepare entries in journal form to record the transactions listed above. No other transactions affecting the capital share accounts have occurred.

Question 2: Assuming that the company has retained earnings from operations of $932,000, prepare the shareholders' equity section of its SFP after considering all the transactions above.