Torrie Corporation Is Authorized to Issue an Unlimited Number of Common

question 27

Essay

Torrie Corporation is authorized to issue an unlimited number of common shares and 1,000,000 shares of preferred shares. During 2013, its first year of operation, the company had profit of $200,000. The following share transactions occurred:
Jan 1 Paid the province $2,000 for incorporation fees.
Jan 15 Issued 500,000 of $1 cumulative preferred shares at $7 per share.
Jan 30 Lawyers for the company accepted 500 common shares as payment for legal services provided in helping the company incorporate. The legal services are estimated to have a value of $5,000. The shares were actively trading at $10.50 per share.
Jul 2 Issued 100,000 common shares for land. The land had an asking price of $900,000. The shares are currently selling on a provincial exchange at $8 per share.
Instructions
a. Journalize the transactions for Torrie Corporation.
b. Prepare the shareholders' equity section of the balance sheet.

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Definitions:

Bailment for Reward

A legal relationship that involves the temporary transfer of personal property to another for a specified fee or reward.

Grossly Negligent

Showing a severe lack of care or deliberation that results in blatant disregard for the safety or rights of others, often leading to extreme harm or risk.

Jeweller

A person or entity engaged in the business of selling and sometimes manufacturing jewelry.

Commercial Aircraft

Airplanes designated for carrying passengers or cargo as part of a business for profit, excluding military or private aircraft.