Moosonee Ltd. was incorporated as a private company on January 2, 2021, and is authorized to issue an unlimited number of common shares and $1 preferred shares. The company had the following share transactions in its first month of operations:Jan. 6Issued 200,000 common shares for $1.50 per share.12Issued 50,000 common shares for $1.75 per share.17Issued 10,000 preferred shares for $25 per share.18Issued 500,000 common shares for $2 per share.24Repurchased 200,000 common shares at $1.90 per share.31Issued 10,000 common shares in exchange for $15,000 of legal services.InstructionsRecord the above transactions.What is the number and average cost of the preferred and common shares at the end of January?If Moosonee were a publicly traded company, how might the journal entry to record the noncash transaction on January 31 change?

Value of common stock Jan6=Number of shares×Issue price=200,000×$1.50=$300,000

Answered: Moosonee Ltd. was incorporated as a…

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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Moosonee Ltd. was incorporated as a private company on January 2, 2021, and is authorized to issue an unlimited number of common shares and $1 preferred shares. The company had the following share transactions in its first month of operations:

Jan. 6	Issued 200,000 common shares for $1.50 per share.
12	Issued 50,000 common shares for $1.75 per share.
17	Issued 10,000 preferred shares for $25 per share.
18	Issued 500,000 common shares for $2 per share.
24	Repurchased 200,000 common shares at $1.90 per share.
31	Issued 10,000 common shares in exchange for $15,000 of legal services.

Instructions

Record the above transactions.
What is the number and average cost of the preferred and common shares at the end of January?
If Moosonee were a publicly traded company, how might the journal entry to record the noncash transaction on January 31 change?

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