Hammond Manufacturing Inc. was legally incorporated on January 2, 2020. its articles of
incorporation granted it the right to issue an unlimited number of common shares and 100,000
shares of $13.6 non-cumulative preferred shares. The following transactions are among those
that occurred during the first three years of operations: Jan. 12 Issued 40,100 comon shares at
$4.0 each. 20 Issued 3,660 connon shares to promoters who provided legal services that helped
to establish the company. These services had a fair value of $28,600. 31 Issued 72,690 common
shares in exchange for land, building, and equipnent, which have fair market values of
$352,000,$472,600, and $40,000, respectively. Mar. 4 Purchased equipnent at a cost of $3, abe
cash. This was thought to be a special bargain price. It was felt that at least $10,600 would
normally have had to be paid to acquire this equipment. Dec. 31 During 282e, the company
incurred a loss of $88,0e0. The Income Summary account was closed. 2921 Jan. 4 Issued 3,660
preferred shares at $64 per share. Dec. 31 The Income summary account was closed. Profit for
2621 was $268,000. 2022 Dec. 4 The conpany declared a cash dividend of 50.82 per share on the
comon shares payable on December 18 and also declared the required dividend on the preferred
shares. 18 Paid the dividends declared on Decenber 4 . 31 Profit for the year ended December
31,2022 , was $160,400. The Income Sumary. account was closed. Required: 1. Journalize the
transactions for the years 2020,2021 , and 2022 . The company does not use a cash dividends
account.
2. Prepare the statement of changes in equity for the year ended December 31,2022 . (Amounts
to be deducted should be indicated by a minus sign.)
3. Prepare the equity section on the December 31,2022 , balance sheet. Anolysis Component:
Determine the net assets of Hammond Manufacturing inc. for 2020. 2021, and 2022, is the trend
favourabie or unfavourable?.
Hammond Manufacturing Inc. was legally incorporated on Januar.pdf
1. Hammond Manufacturing Inc. was legally incorporated on January 2, 2020. its articles of
incorporation granted it the right to issue an unlimited number of common shares and 100,000
shares of $13.6 non-cumulative preferred shares. The following transactions are among those
that occurred during the first three years of operations: Jan. 12 Issued 40,100 comon shares at
$4.0 each. 20 Issued 3,660 connon shares to promoters who provided legal services that helped
to establish the company. These services had a fair value of $28,600. 31 Issued 72,690 common
shares in exchange for land, building, and equipnent, which have fair market values of
$352,000,$472,600, and $40,000, respectively. Mar. 4 Purchased equipnent at a cost of $3, abe
cash. This was thought to be a special bargain price. It was felt that at least $10,600 would
normally have had to be paid to acquire this equipment. Dec. 31 During 282e, the company
incurred a loss of $88,0e0. The Income Summary account was closed. 2921 Jan. 4 Issued 3,660
preferred shares at $64 per share. Dec. 31 The Income summary account was closed. Profit for
2621 was $268,000. 2022 Dec. 4 The conpany declared a cash dividend of 50.82 per share on the
comon shares payable on December 18 and also declared the required dividend on the preferred
shares. 18 Paid the dividends declared on Decenber 4 . 31 Profit for the year ended December
31,2022 , was $160,400. The Income Sumary. account was closed. Required: 1. Journalize the
transactions for the years 2020,2021 , and 2022 . The company does not use a cash dividends
account.
2. Prepare the statement of changes in equity for the year ended December 31,2022 . (Amounts
to be deducted should be indicated by a minus sign.)
3. Prepare the equity section on the December 31,2022 , balance sheet. Anolysis Component:
Determine the net assets of Hammond Manufacturing inc. for 2020. 2021, and 2022, is the trend
favourabie or unfavourable?
