Reference no: EM133004688

Question - At December 31, 2020, The Sandy Beach Company had the following balances in their equity accounts. There were 50,000 non-cumulative preferred shares with an ending balance of $250,000. The preferred shares had a dividend preference of $2.00 / share. There were 150,000 common shares issued with an ending balance of $350,000. The amount in Retained Earnings was $475,000. The company was authorized to issue unlimited preferred and common shares.

The following equity transactions occurred during 2021.

Mar 2 Exchanged 90,000 common shares for building with a fair market value of $200,000.

Jun 1 The board of directors declared a 5% common share dividend, distributable on October 31 to the October 20 shareholders of record. The shares were selling at $3 per share.

Jun 30 The share dividend declared on June 1 was distributed.

Sept 17 The corporation issued 10,000 preferred shares at $5 per share.

Oct 5 The board of directors declared a cash dividend payable to shareholders of record on October 25 of $150,000 payable on October 31.

Oct 31 The cash dividend declared on October 5 was paid.

Nov 2 The board of directors declared a 3 for 1 share split to common shareholders of record on November 15 to be distributed on November 30. (Include note disclosure)

Dec 31 The Income Summary account had a $100,000 debit balance. Close the Income Summary Account and the Dividend accounts (if applicable).

REQUIRED -

-Prepare journal entries for the year 2021. Omit explanations but show calculations.

-Prepare a statement of changes in Equity for the year ended December 31, 2021.

-Prepare the equity section of the balance sheet for the year end December 31, 2021.