Hammond Manufacturing Inc. was legally incorporated on January 2, 2023. Its articles of incorporation granted it the right to issue an unlimited number of common shares and 100,000 shares of $14.40 non-cumulative preferred shares. The following transactions are among those that occurred during the first three years of operations: 2023 Jan. Mar. Dec. 12 Issued 40,000 common shares at $4.80 each. 20 Issued 6,000 common shares to promoters who provided legal services that helped to establish the company. These services had a fair value of $36,000. 31 Issued 80,000 common shares in exchange for land, building, and equipment, which have fair market values of $360,000, $480,000, and $48,000, respectively. 4 Purchased equipment at a cost of $8,160 cash. This was thought to be a special bargain price. It was felt that at least $10,800 would normally have had to be paid to acquire this equipment. 31 During 2023, the company incurred a loss of $96,000. The Income Summary account was closed. 2024 Jan. Dec. 2825 Dec. 4 Issued 5,000 preferred shares at $72 per share. 31 The Income Summary account was closed. Profit for 2024 was $216,000. 4 The company declared a cash dividend of $0.12 per share on the common shares payable on December 18 and also declared the required dividend on the preferred shares. 18 Paid the dividends declared on December 4. 31 Profit for the year ended December 31, 2025, was $192,000. The Income Summary account was closed. Required: 1. Journalize the transactions for the years 2023, 2024, and 2025. The company does not use a cash dividends account
Hammond Manufacturing Inc. was legally incorporated on January 2, 2023. Its articles of incorporation granted it the right to issue an unlimited number of common shares and 100,000 shares of $14.40 non-cumulative preferred shares. The following transactions are among those that occurred during the first three years of operations: 2023 Jan. Mar. Dec. 12 Issued 40,000 common shares at $4.80 each. 20 Issued 6,000 common shares to promoters who provided legal services that helped to establish the company. These services had a fair value of $36,000. 31 Issued 80,000 common shares in exchange for land, building, and equipment, which have fair market values of $360,000, $480,000, and $48,000, respectively. 4 Purchased equipment at a cost of $8,160 cash. This was thought to be a special bargain price. It was felt that at least $10,800 would normally have had to be paid to acquire this equipment. 31 During 2023, the company incurred a loss of $96,000. The Income Summary account was closed. 2024 Jan. Dec. 2825 Dec. 4 Issued 5,000 preferred shares at $72 per share. 31 The Income Summary account was closed. Profit for 2024 was $216,000. 4 The company declared a cash dividend of $0.12 per share on the common shares payable on December 18 and also declared the required dividend on the preferred shares. 18 Paid the dividends declared on December 4. 31 Profit for the year ended December 31, 2025, was $192,000. The Income Summary account was closed. Required: 1. Journalize the transactions for the years 2023, 2024, and 2025. The company does not use a cash dividends account
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Hammond Manufacturing Inc. was legally incorporated on January 2, 2023. Its articles of incorporation granted it the right to issue an
unlimited number of common shares and 100,000 shares of $14.40 non-cumulative preferred shares. The following transactions are
among those that occurred during the first three years of operations:
2023
Jan.
Mar.
Dec.
12 Issued 40,000 common shares at $4.80 each.
20 Issued 6,000 common shares to promoters who provided legal services that helped to
establish the company. These services had a fair value of $36,000.
31 Issued 80,000 common shares in exchange for land, building, and equipment, which have
fair market values of $360,000, $480,000, and $48,000, respectively.
4 Purchased equipment at a cost of $8,160 cash. This was thought to be a special bargain
price. It was felt that at least $10,800 would normally have had to be paid to acquire
this equipment.
31 During 2023, the company incurred a loss of $96,000. The Income Summary account was
closed.
2024
Jan.
Dec.
2825
Dec.
4 Issued 5,000 preferred shares at $72 per share.
31 The Income Summary account was closed. Profit for 2024 was $216,000.
4 The company declared a cash dividend of $0.12 per share on the common shares payable on
December 18 and also declared the required dividend on the preferred shares.
18 Paid the dividends declared on December 4.
31 Profit for the year ended December 31, 2025, was $192,000. The Income Summary account
was closed.
Required:
1. Journalize the transactions for the years 2023, 2024, and 2025. The company does not use a cash dividends account
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