"ments; P13.12A (LO 2, 3, 4, 5, 6) AP Annora Inc., a private company, is authorized to issue an unlimited num- ber of common shares and 100,000 noncumulative $4 preferred shares. It began operations on January 1, 2021, and the following are selected transactions during 2021: Jan. 1 2 Dec. 1 31 Issued 300,000 common shares for $150,000 cash. Issued 30,000 preferred shares for $40 cash per share. Declared a total of $225,000 in dividends, payable on January 5, to shareholders of record on December 13. Determined that it had total revenues of $915,000 and operating expenses of $610,000. Annora elected to report under ASPE. It has a 15% income tax rate and paid income tax instalments during the year of $40,000. Instructions a. Record the share issue and dividend transactions. b. Prepare a partial income statement starting with profit before income tax and record the adjusting entry for income tax. c. Prepare a statement of retained earnings and the shareholders' equity section of the balance sheet. Taking It Further Why are common shareholders sometimes referred to as "residual owners"?

"ments; P13.12A (LO 2, 3, 4, 5, 6) AP Annora Inc., a private company, is authorized to issue an unlimited num- ber of common shares and 100,000 noncumulative $4 preferred shares. It began operations on January 1, 2021, and the following are selected transactions during 2021: Jan. 1 2 Dec. 1 31 Issued 300,000 common shares for $150,000 cash. Issued 30,000 preferred shares for $40 cash per share. Declared a total of $225,000 in dividends, payable on January 5, to shareholders of record on December 13. Determined that it had total revenues of $915,000 and operating expenses of $610,000. Annora elected to report under ASPE. It has a 15% income tax rate and paid income tax instalments during the year of $40,000. Instructions a. Record the share issue and dividend transactions. b. Prepare a partial income statement starting with profit before income tax and record the adjusting entry for income tax. c. Prepare a statement of retained earnings and the shareholders' equity section of the balance sheet. Taking It Further Why are common shareholders sometimes referred to as "residual owners"?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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