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On January 1 2017 Conway Ltd had the following shareholders equity accounts Common shares unlimited

On January 1, 2017, Conway Ltd. had the following shareholders equity accounts: Common shares, unlimited number of shares authorized, 1.5 million issued......$1,650,000 Retained earnings..............................................................................550,000 It was also authorized to issue an unlimited number of $6 noncumulative preferred shares. During 2017, the corporation had the following transactions and events related to its shareholders equity: Jan. 2 Issued 100,000 preferred shares at $66 per share. Mar. 31 Paid quarterly dividend to preferred shareholders. Apr. 18 Issued 250,000 common shares at $1.30 per share. June 30 Paid quarterly dividend to preferred shareholders. Sept. 30 Paid quarterly dividend to preferred shareholders. Dec. 31 Paid quarterly dividend to preferred shareholders. Dec. 31 Profit for the year was $160,000. Instructions: (a) Journalize the transactions and the entries to close dividends and the Income Summary account. (b) Open general ledger accounts for the shareholders equity accounts, enter the beginning balances, and post transactions in part (a). (c) Prepare the shareholders equity section of the balance sheet at December 31, 2017, including any required disclosures. Assume Conway reports under ASPE. TAKING IT FURTHER What conditions must be met to declare dividends in a corporation?

Apr 24 2020 View more View Less

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