Reference no: EM132827748

Question - The following transactions have occurred for Comeback Kid Corporation (COC):

1) Jan.1/21: The newly formed company (COC) is granted a charter authorizing the issuance of 200,000 preferred shares and an unlimited number of common shares.

2) Jan.30/21: The three company founders are issued 4,000 shares EACH in return for land and buildings valued at $300,000 and $75,000 respectively.

3) Feb.17/21: Sold 18,000 preferred shares for cash of $120 per share.

4) June 15/21: Repurchased 3,500 of the outstanding preferred shares for cash of $110 per share and then subsequently cancelled these shares. 5) Aug.4/21: Repurchased 1,000 of the outstanding common shares for cash of $35 and then subsequently cancelled these shares. 6) Oct.15/21: Paid a $2 per share dividend on all outstanding common shares as of at Sept.30/21.

Required -

a) Prepare the journal entries to record the above transactions. Note that no other transactions impacting the capital share accounts have occurred.

b) Prepare the Shareholders' Equity section of the Statement of Financial Position as of at Dec.31/21 assuming that COC has retained earnings from its operations of $850,000.