Tony and Suzie have purchased land for a new camp. Now they needmoney to build the cabins, dining facility, a ropes course, and anoutdoor swimming pool. Tony and Suzie first checked with SummitBank to see if they could borrow an additional $1 million, butunfortunately the bank turned them down as too risky. Undeterred,they promoted their idea to close friends they had made through theoutdoor clinics and TEAM events. They decided to go ahead and sellshares of stock in the company to raise the additional funds forthe camp.
Great Adventures has authorized $1 par value common stock. Whenthe company began on July 1, 2021, Tony and Suzie each purchased10,000 shares (20,000 shares total) of $1 par value common stock at$1 per share. The following transactions affect stockholders’equity during the remainder of 2022:
| November | 5 | | Issue an additional 138,000 shares of common stock for $10 pershare. |
| November | 16 | | Purchase 13,800 shares of its own common stock (i.e., treasurystock) for $34 per share. |
| November | 24 | | Resell 7,800 shares of treasury stock at $35 per share. |
| December | 1 | | Declare a cash dividend on its common stock of $15,960 ($0.10per share) to all stockholders of record on December 15. |
| December | 20 | | Pay the cash dividend declared on December 1. |
| December | 31 | | Pay $895,000 for construction of new cabins and otherfacilities. The entire expenditure is recorded in the Buildingsaccount. |
Required:
1. Record each of these transactions.
2. Great Adventures has net income of $42,307in 2022. Retained earnings at the beginning of 2022 was $35,350.Prepare the stockholders’ equity section of the balance sheet forGreat Adventures as of December 31, 2022.
