Deck 2: Corporations: Share Capital and the Balance Sheet

Question 1

20_Which of the following forms of business organizations is a distinct legal entity?

A) partnership
B) corporation
C) proprietorship
D) only proprietorship and partnership

Answer 1

B

Question 2

18_All of the following represent advantages of corporations over other business entities except:

A) unlimited shareholders' liability
B) continuity of existence
C) separate legal entity
D) ease of transferring ownership

Answer 2

A

Question 3

14_Corporate bylaws are established by provincial governments to regulate company operations in the interest of the public.

Answer 3

False

Question 4

4_Double taxation refers to the fact that a corporation pays tax on its taxable earnings and the shareholder also pays personal tax on the dividend income they receive from the corporation.

Question 5

15_The articles of incorporation determines the rights given to each class of shares.

Question 6

19_Which of the following statements describing a corporation is true?

A) Shareholders are the creditors of a corporation.
B) Shareholders own the business and manage its day-to-day operations.
C) A corporation is subject to greater governmental regulation than a proprietorship or a partnership.
D) When ownership of a corporation changes, the corporation terminates.

Question 7

13_The policy-making body of a corporation is called the board of directors.

Question 8

2_Shareholders in a corporation are personally liable for the debts of the corporation.

Question 9

1_A corporation is a separate legal entity apart from its owners.

Question 10

12_A debit balance in retained earnings is referred to as a deficit.

Question 11

6_Unlimited liability is one of the advantages of the corporate structure for an organization.

Question 12

16_Annually the corporation must pay dividends to their shareholders.

Question 13

10_Retained earnings is debited to transfer net income to the retained earnings account during the closing process.

Question 14

8_The most that a shareholder can lose on an investment in a corporation's shares is the cost of the investment.

Question 15

11_Retained earnings represents investments by the shareholders of the corporation.

Question 16

7_Mutual agency is one of the disadvantages of the corporate structure for an organization.

Question 17

3_All shares issued by a corporation have voting rights.

Question 18

5_It is easier to achieve continuous life using the corporate structure for an organization.

Question 19

9_Corporations pay the same taxes as partnerships and proprietorships.

Question 20

17_The document(s_used by a government to grant permission to form a corporation is called (a):

A) proxy
B) articles of incorporation
C) share certificate
D) bylaw agreement

Question 21

40_Your friends have come to you for advice.They are starting a landscaping business and are confused about which organizational structure to choose - partnership or corporation.What structure would you recommend? Support your recommendation by discussing the advantages and disadvantages of both of these organizational structures.

Question 22

29_A debit balance in retained earnings is referred to as a(n):

A) normal balance
B) asset
C) deficit
D) liability

Question 23

Table 13-9
Following is the JenWu Corporation December 31, 2017 shareholders' equity section of the balance sheet, prior to the closing entries:
$$\begin{array} { | l | r | } \hline \text { Contributed capital: } & \\\hline \text { Preferred shares, cumulative, } \$ 5.00,6,000 \text { shares outstanding, } & \\\hline \text { liquidation value } \$ 42 \text { per share } & \$ 220,000 \\\hline \text { Common shares, } 30,000 \text { shares outstanding } & 500,000 \\\hline \text { Retained earnings/(deficit) } & ( 240,000 ) \\\hline\end{array}$$ Note: No dividends were declared in 2015 or 2016. The net income for 2017 was $260,000.

-Referring to Table 13-9,what is the journal entry to close the Income Summary account?

A) $$\begin{array} { | c | r | r | } \hline \text { Dr. Retained Earnings } & 260,000 & \\\hline \text { Cr. Income Summary } & & 260,000 \\\hline\end{array}$$
B) $$\begin{array} { | c | r | r | } \hline \text { Dr. Retained Earnings } & 350,000 & \\\hline \text { Cr. Preferred Dividend Payable } & & 90,000 \\\hline \text { Cr. Income Summary } & & 260,000 \\\hline\end{array}$$
C) $$\begin{array} { | c | r | r | } \hline \text { Dr. Income Earnings } & 260,000 & \\\hline \text { Cr. Retained Earnings } & & 260,000 \\\hline\end{array}$$
D) $$\begin{array} { | c | r | r | } \hline \text { Dr. Income Summary } & 260,000 & \\\hline \text { Cr. Preferred Dividend Expense } & & 90,000 \\\hline \text { Cr. Retained Earnings } & & 170,000 \\\hline\end{array}$$

Question 24

List at least four of the shareholder rights normally attached to common shares.

Question 25

38_Discuss a least six characteristics of a corporation.Indicate,wherever appropriate,if the characteristic is an advantage or a disadvantage of the corporate form of business.

Question 26

30_Cash dividends:

A) do not affect the retained earnings of a corporation
B) decrease both the assets and the total shareholders' equity of the corporation
C) increase retained earnings
D) increase the assets and decrease the total shareholders' equity of the corporation

Question 27

25_Retained earnings:

A) is classified as an asset on the corporate balance sheet
B) is part of contributed capital
C) represents investments by the shareholders of the corporation
D) represents capital earned by profitable operations

Question 28

26_The owners of a corporation are referred to as:

A) creditors
B) shareholders
C) partners
D) debtors

Question 29

35_Which of the following statements describes the corporate characteristic termed double taxation?

A) The liabilities of the corporation cannot be extended to the personal assets of the shareholder.
B) Shares of stock can be readily bought and sold by investors on the open market.
C) Shareholders are not authorized to sign contracts or make business commitments on behalf of the corporation.
D) Corporations pay income tax on corporate earnings, and shareholders pay personal income tax on corporate dividends and gains from sale of stock.

Question 30

32_All of the following are basic rights of a common shareholder except:

A) the right to receive a proportionate share of the corporate assets remaining after the corporation pays its liabilities in liquidation
B) the right to receive a proportionate share of the corporate assets prior to the payment of liabilities in liquidation
C) the right to receive a proportionate share of any dividend
D) the right to vote

Question 31

33_The heading Contributed Capital appears on which section of the balance sheet?

A) current assets
B) long-term liabilities
C) property, plant and equipment
D) shareholders' equity

Question 32

34_Which of the following statements describes the corporate characteristic termed limited liability?

A) The liabilities of the corporation cannot be extended to the personal assets of the shareholder.
B) Shares of stock can be readily bought and sold by investors on the open market.
C) Shareholders are not authorized to sign contracts or make business commitments on behalf of the corporation.
D) Corporations pay income tax on corporate earnings, and shareholders pay personal income tax on corporate dividends and gains from sale of stock.

Question 33

27_A profitable corporation would close out Income Summary by:

A) debiting Income Summary and crediting Share Capital
B) debiting Income Summary and crediting Retained Earnings
C) crediting Income Summary and debiting Retained Earnings
D) crediting Income Summary and debiting Share Capital

Question 34

28_A corporation operating at a loss would close out Income Summary by:

A) debiting Income Summary and crediting Retained Earnings
B) debiting Income Summary and crediting Share Capital
C) crediting Income Summary and debiting Retained Earnings
D) crediting Income Summary and debiting Share Capital

Question 35

31_Which of the following statements about Dividends is TRUE?

A) Dividends must be paid on an annual basis.
B) Dividends increase both the assets and retained earnings of the corporation
C) Dividends are the distribution of earnings to the shareholders, similar to withdrawals.
D) Dividends are the bonuses paid to the corporation's board of directors.

Question 36

22_Which of the following is a disadvantage of the corporate form of business organization?

A) mutual agency
B) government regulation
C) limited liability
D) difficulty in transferring ownership

Question 37

36_Which of the following statements describes the corporate characteristic termed no mutual agency?

A) The liabilities of the corporation cannot be extended to the personal assets of the shareholder.
B) Shares of stock can be readily bought and sold by investors on the open market.
C) Shareholders are not authorized to sign contracts or make business commitments on behalf of the corporation.
D) Corporations pay income tax on corporate earnings, and shareholders pay personal income tax on corporate dividends and gains from sale of stock.

Question 38

24_Share capital represents:

A) investments by the creditors of a corporation
B) capital that the corporation has earned through profitable operations
C) investments by the shareholders of a corporation
D) retained earnings

Question 39

21_Shareholders' liability for corporation debts is generally limited to:

A) the cost of their investment
B) the market value of the shares
C) the par value of the shares
D) total shareholders' equity

Question 40

23_Which of the following forms of business organizations terminates when the ownership structure changes?

A) corporation
B) partnership
C) share capital
D) shareholders' equity

Question 41

10_All of the following transactions increase shareholders' equity except:

A) issuance of common shares
B) profitable operations
C) declaration of a cash dividend
D) issuance of convertible preferred shares

Question 42

9_Corporations may use an underwriter to sell their shares rather than selling them directly to investors.

Question 43

13_Why might corporations prefer issuing preferred shares to debt?

A) Dividends are payable at the discretion of the corporation.
B) Debt payments are payable at the discretion of the corporation.
C) Dividends are tax deductible to the corporation.
D) Interest expense is tax deductible to the corporation.

Question 44

17_The entry to record the issuance of 15,000 preferred shares at $13.50 per share includes a:

A) credit to Retained Earnings $202,500
B) credit to Preferred Shares for $202,500
C) debit to Retained Earnings for $202,500
D) credit to Common Shares for $202,500

Question 45

2_Preferred shares normally have voting rights.

Question 46

8_If a company has both preferred and common shares outstanding,the preferred shareholders have the first claim to shareholders' equity.

Question 47

12_A corporation may issue:

A) common shares and preferred shares
B) preferred shares but not common shares
C) common shares but not preferred shares
D) either common shares or preferred shares but not both

Question 48

15_The entry to record the issuance of 10,000 common shares for $2.30 per share includes a:

A) debit to Retained Earnings for $23,000
B) debit to Cash for $23,000
C) credit to Retained Earnings for $23,000
D) debit to Common Shares for $23,000

Question 49

1_No-par-value shares are shares of stock that do not have a value assigned to them by the articles of incorporation.

Question 50

6_Increases in contributed capital and in retained earnings come from producing revenue.

Question 51

19_Land is acquired by issuing 500 common shares.The land has a current market value of $12,000.There is no market value for the common shares available.The journal entry requires a:

A) debit to Cash for $12,000
B) debit to Common Shares for $12,000
C) credit to Retained Earnings for $12,000
D) credit to Common Shares for $12,000

Question 52

11_Which of the following is a priority granted to preferred shareholders?

A) voting for the corporate board of directors
B) receiving assets before creditors if the corporation liquidates
C) receiving dividends before common shareholders
D) receiving a guaranteed fixed dollar amount of dividends each year

Question 53

5_Organization costs are classified as intangible assets.

Question 54

14_An owner investment of cash in a corporation increases:

A) assets and increases liabilities
B) one asset and decreases another asset
C) assets and decreases shareholders' equity
D) assets and increases shareholders' equity

Question 55

20_A corporation issues common shares in exchange for equipment with a market value of $15,000.This transaction would:

A) increase retained earnings by $15,000
B) increase liabilities by $15,000
C) increase common shares by $15,000
D) decrease total shareholders' equity by $15,000

Question 56

18_When 35,000 common shares are issued at $16.50 per share,total contributed capital:

A) increases by $577,500
B) increases by $350,000
C) increases by $227,500
D) decreases by $577,500

Question 57

4_The shareholders' equity section of a balance sheet lists common shares first,followed by preferred shares second,and retained earnings last.

Question 58

16_The entry to record the issuance of 6,000 common shares for $12.50 per share includes a:

A) credit to Cash for $75,000
B) debit to Common Shares for $75,000
C) credit to Common Shares for $75,000
D) credit to Retained Earnings for $75,000

Question 59

3_When a corporation issues shares in exchange for noncash assets,the noncash assets are debited for their book value.

Question 60

7_Convertible preferred shares must be converted into common shares when the corporation declares the conversion.

Question 61

Overton Company had the following transactions in 2013,its first year of operations. -Issued 5,000 common shares at $\$ 30.00$ per share
- Earned net income of $\$ 200,000$ .
- Paid dividends of $\$ 5.00$ per share. At the end of 2013,how much is the total contributed capital?

A) $150,000
B) $325,000
C) $175,000
D) $200,000

Question 62

Table 13-1
The following selected list of accounts with their normal balances was taken from the general ledger of Grant Corporation as of December 31, 2014:
$\begin{array}{|l|r|}\hline \text { Cash } & \$ 173,500 \\\hline \text { Common shares, } 100,000 \text { shares authorized, } 38,000 \text { shares issued } & 190,000 \\\hline \text { Retained earning } & 131,500 \\\hline \text { Cash dividends payable } & 25,000 \\\hline \text { Preferred shares, } 300,000 \text { shares authorized } 200,000 \text { shares issued } & 500,000 \\\hline\end{array}$

-Refer to Table 13-1.The total shareholders' equity as of December 31,2014 was:

A) $190,000
B) $846,500
C) $881,500
D) $821,500

Question 63

Beta Company was founded in 2014.Its yearly earnings and dividend payments are shown here: 2012: Net income $\$ 4,000$ , paid zero dividends
2013: Net income $\$ 20,000$ , paid $\$ 10,000$ dividends
2014: Net income of $\$ 8,000$ , paid $\$ 5,000$ dividends
2015: Net loss of $\$ 22,000$ , paid zero dividends At the end of 2015,which of the following statements would be accurate?

A) Beta has a cumulative operating loss.
B) Beta has a retained earnings deficit.
C) Beta has retained earnings surplus.
D) Beta has negative contributed capital.

Question 64

22_Organization costs appear on which section of the balance sheet?

A) current assets
B) intangible assets
C) shareholders' equity
D) long-term liabilities

Question 65

Table 13-6
The following selected list of accounts with their normal balances was taken from the general ledger of Gore Ltd. as of December 31, 2017:
$$\begin{array} {| l | r| } \hline \text { Cash } & \$ 199,000 \\\hline \text { Common shares, } 10,000 \text { shares authorized, } 5,000 \text { shares issued } & 265,000 \\\hline\text { Retained earnings }& 131,5000\\\hline \text { Cash dividends payable } &20,000 \\\hline \begin{array} { l } \text { Preferred shares, 500,000 shares authorized } 100,000 \text { shares } \\\text { issued }\end{array} & 800,000 \\\hline\end{array}$$

-Refer to Table 13-6.The average issue price of a preferred share was:

A) $1.60
B) $20.00
C) $40.00
D) $8.00

Question 66

Notebook Company had the following transactions in 2013,its first year of operations. - Issued 2,000 common shares. Shares were issued at $\$ 50.00$ per share.
- Issued 100 preferred shares. Share were issued at $\$ 100$ per share.
- Earned net income of $\$95,000$ .
-Paid dividends of $\$ 5,000$ . At the end of 2013,how much was the total Shareholders' equity?

A) $200,000
B) $110,000
C) $90,000
D) $100,000

Question 67

From the following alphabetical list of selected accounts taken from the general ledger of Dorlin Corporation as of December 31,2014,select the accounts that are part of shareholders' equity.Then prepare the shareholders' equity section of the balance sheet on December 31,2014.
$$\begin{array} { l l } \text { Accounts receivable } & 50,000 \\\text { Cash dividends payable } & 20,000 \\\text { Common shares, 20,000 shares outstanding } & 550,000 \\\text { Inventory } & 75,000 \\\text { Note payable } & 25,000 \\\text { Notes receivable } & 20,000\end{array}$$ Preferred shares,$10 cumulative,
1,000 shares outstanding $\quad$$\quad$ 250,000
Retained earnings $\quad$$\quad$$\quad$$\quad$ 250,000
Unearned revenue $\quad$$\quad$$\quad$$\quad$ 15,000

Question 68

Prepare a journal entry for each of the following transactions.
a_KBM Consulting Inc.sells 2,000 shares of $4,cumulative preferred shares for $70 per share.
b_KBM Consulting Inc.sells 80,000 common shares for $4.50 per share.
c_Received equipment with a market value of $90,000,and issued 12,400 common shares in exchange.
d_KBM Consulting Inc.reports a net income for the current year of $425,000.Prepare the entry to close the income summary account.
$$\begin{array} { | c | c | c | c | } \hline \text { Date } & \text { Accounts } & \text { Debit } & \text { Credit } \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline\end{array}$$

Question 69

40_Why would a corporation issue preferred shares instead of common shares,explain the advantage of this decision.

Question 70

21_Accounting for the incorporation of an unincorporated business that currently exists as either a sole proprietorship or partnership involves:

A) closing the owner equity accounts of the prior entity and setting up the shareholder equity accounts of the corporation
B) leaving the owner equity accounts as is and setting up the shareholders' equity accounts for the corporation
C) closing the owner equity accounts of the prior entity to the retained earnings account of the corporation
D) closing the withdrawals accounts to the dividends payable accounts

Question 71

Table 13-1
The following selected list of accounts with their normal balances was taken from the general ledger of Grant Corporation as of December 31, 2014:
$\begin{array}{|l|r|}\hline \text { Cash } & \$ 173,500 \\\hline \text { Common shares, } 100,000 \text { shares authorized, } 38,000 \text { shares issued } & 190,000 \\\hline \text { Retained earning } & 131,500 \\\hline \text { Cash dividends payable } & 25,000 \\\hline \text { Preferred shares, } 300,000 \text { shares authorized } 200,000 \text { shares issued } & 500,000 \\\hline\end{array}$

-Refer to Table 13-1.Which account should be listed first in the shareholders' equity section?

A) Retained earnings
B) Common shares
C) Contributed surplus
D) Preferred shares

Question 72

39_An investor has the choice of investing in common shares,preferred shares or bonds (long-term debt).Explain the benefits,cons and riskiness of each option.

Question 73

Table 13-6
The following selected list of accounts with their normal balances was taken from the general ledger of Gore Ltd. as of December 31, 2017:
$$\begin{array} {| l | r| } \hline \text { Cash } & \$ 199,000 \\\hline \text { Common shares, } 10,000 \text { shares authorized, } 5,000 \text { shares issued } & 265,000 \\\hline\text { Retained earnings }& 131,5000\\\hline \text { Cash dividends payable } &20,000 \\\hline \begin{array} { l } \text { Preferred shares, 500,000 shares authorized } 100,000 \text { shares } \\\text { issued }\end{array} & 800,000 \\\hline\end{array}$$

-Refer to Table 13-6.The average issue price of a common share was:

A) $20.00
B) $26.50
C) $53.00
D) $30.00

Question 74

Nevada Corporation was a private corporation created on January 2,2014.The articles of incorporation from the Government of Canada authorize Nevada Corporation to issue an unlimited number of common shares and 500,000 shares of $0.50 preferred shares.The company had the following transactions:
2014
Jan. 2 $\quad$ Gue 5,060 common shares to the corporation's legal firm for incorporating the business. The total legal fee was $\$ 5,000$ .
3 $\quad$ Issued 200,000 common shares for cash at $\$ 1$ per share.
4 $\quad$ Issued 10,000 preferred shares for cash at $\$ 10$ per share.
4 $\quad$ Exchanged $50,000 cash and 200,000 common shares for a building with a market value of $\$ 260,000$ .
Dec. 31 $\quad$ Close Income Summary to Retained Earnings assuming that Nevada had $\$ 63,000$ of net a_Journalize the above transactions.Explanations are not needed.
b_Prepare the shareholders' equity section of the balance sheet as of the close of business on December 31,2014.
$$\begin{array}{l}\quad\quad\quad\quad\quad\quad\quad\quad\text { Journal }\\\begin{array} { l | l | l | l } \hline \text { Date } & \text { Description } & \text { Debit } & \text { Credit } \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline\end{array}\end{array}$$

Question 75

Table 13-1
The following selected list of accounts with their normal balances was taken from the general ledger of Grant Corporation as of December 31, 2014:
$\begin{array}{|l|r|}\hline \text { Cash } & \$ 173,500 \\\hline \text { Common shares, } 100,000 \text { shares authorized, } 38,000 \text { shares issued } & 190,000 \\\hline \text { Retained earning } & 131,500 \\\hline \text { Cash dividends payable } & 25,000 \\\hline \text { Preferred shares, } 300,000 \text { shares authorized } 200,000 \text { shares issued } & 500,000 \\\hline\end{array}$

-Refer to Table 13-1.The average issue price of a preferred share was:

A) $2.50
B) $6.90
C) $5.00
D) $3.80

Question 76

Prepare journal entries for the following transactions reported by Evans Corporation for the month of May:
May 1 Issued 35,000 common shares at $\$ 15$ per share.
21 Issued 1,400 shares of $\$ 5$ , cumulative preferred shares for a total of $\$ 144,200$ .
28Exchanged 5,000 common shares for a patent valued at $\$82,000$ .
31Evans Corporation reported a net loss for May amounting to $\$ 10,500$ Prepare the entry to close the income summary account.
$$\begin{array} { | c | c | c | c | } \hline \text { Date } & \text { Accounts } & \text { Debit } & \text { Credit } \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline\end{array}$$

Question 77

Prepare a journal entry for each of the following transactions.
a_Masters Corporation sells 10,000 common shares for $13.25 per share.
b_Masters Corporation sells 5,000 shares of $5,cumulative preferred shares for $55 per share.
c_Received a building with a market value of $160,000,and issued 6,400 common shares in exchange.
d_Masters Corporation reports a net income for the current year of $56,000.Prepare the entry to close the income summary account.
$$\begin{array} { | c | c | c | c | } \hline \text { Date } & \text { Accounts } & \text { Debit } & \text { Credit } \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline\end{array}$$

Question 78

Table 13-12
The following accounts and related balances of FYI Advertising Ltd. are as at December 31, 2017 prior to the closing journal entries.
$$\begin{array} { | l | r | } \hline \text { Accrued Liabilities }&\$50,400 \\\hline \text { Preferred Shares, } \$ 2.50 , \text { cumulative, } 24,000 \text { authorized and } \\\text { Issued } & 240,000 \\\hline \text { Prepaid Expenses } & 3,600 \\\hline \text { Accounts Payable } & 90,000 \\\hline \text { Interest Expense } & 29,000 \\\hline \text { Trademark, net } & 20,400 \\\hline \text { Long-term Note Payable } &600,000 \\\hline \text { Property, Plant, and Equipment, net } & 3,360,000 \\\hline \text { Retained Earnings } &623,600 \\\hline \text { Accounts Receivable, net } &318,000 \\\hline \text { Inventory } & 420,000\\\hline \text {Common Shares, 300,000 shares authorized; } 200,000 \text { shares } \\\text { Issued }&2,500,000\\\hline \text { Cash } & 384,000 \\\hline \text { Organization Costs } & 18,000 \\\hline\end{array}$$ Additional information:
$$\begin{array} { l l } \text { Total Assets, january } 1,2017 & \$ 4,100,000 \\\text { Net income for } 2017 & \$ 420,000\end{array}$$ No new shares were issued in 2017.

-Referring to Table 13-12,prepare a classified balance sheet as at December 31,2017.

Question 79

Table 13-1
The following selected list of accounts with their normal balances was taken from the general ledger of Grant Corporation as of December 31, 2014:
$\begin{array}{|l|r|}\hline \text { Cash } & \$ 173,500 \\\hline \text { Common shares, } 100,000 \text { shares authorized, } 38,000 \text { shares issued } & 190,000 \\\hline \text { Retained earning } & 131,500 \\\hline \text { Cash dividends payable } & 25,000 \\\hline \text { Preferred shares, } 300,000 \text { shares authorized } 200,000 \text { shares issued } & 500,000 \\\hline\end{array}$

-Refer to Table 13-1.The average issue price of a common share was:

A) $3.80
B) $1.90
C) $5.00
D) $0.95

Question 80

Table 13-11
The following accounts and related balances of ETH Engineering Ltd. are as at December 31, 2017 prior to the closing journal entries.
$$\begin{array} { | l | r } \hline \text { Prademark, net } & \$ 17,000 \\\hline \text { Preferred Shares, } \$ 2.50,20,000 \text { authorized and issued } & 200,000 \\\hline \text { Cash } & 320,000 \\\hline \text { Accounts Receivable, net } &265,000 \\\hline \text { Accrued Liabilities } & 42,000 \\\hline \text { Long-term Note Payable } &500,000 \\\hline \text { Interest Expense } &35,000\\\hline \text { Inventory } & 350,000 \\\hline \text { Retained Earnings/(Deficit) } & (1,197,000) \\\hline \text { Accounts Payable } &75,000 \\\hline \text { Property, Plant, and Equipment, net } &2,800,000 \\\hline \text { Common Shares, 300,000 shares authorized; } 175,000 \text { shares } \\\text { Issued } & 3,500,000 \\\hline \text { Prepaid Expenses } &3,000 \\\hline \text { Organization Costs } &15,000 \\\hline\end{array}$$ Additional information:
$$\begin{array} { l l } \text { Total Assets, January } 1,2017 & \$ 3,200,000 \\\text { Net income for } 2017 & \$ 650,000\end{array}$$ No new shares were issued in 2017.

-Referring to Table 13-11,prepare a classified balance sheet as at December 31,2014.