Networking Solutions Inc. began operations on January 1, 2011, and immediately issued its shares, receiving cash. A-1's balance sheet at December 31, 2011, reported the following shareholders' equity:
Common shares ................................................................................ $249,500
Contributed surplus.......................................................................... 800
Retained earnings.............................................................................. 38,000
Total shareholders' equity ................................................................. $288,300
During 2011, A-1
a. Issued 50,000 common shares for $5 per share
b. Repurchased 800 of its own common shares for cancellation, paying $4 per share
c. Issued common shares for $7 each
d. Earned net income of $56,000 and declared and paid cash dividends. Revenues were $171,000 and expenses totalled $115,000.
Required
Journalize all A-1's shareholders' equity transactions during the year. A-1's entry in part (d) to close net income to Retained Earnings was:
Revenues 171,000
Expenses 115,000
Retained Earnings 56,000