Fun City Inc. ended 2016 with 8 million common shares issued and outstanding. The average issue price

Question:

Fun City Inc. ended 2016 with 8 million common shares issued and outstanding. The average issue price was $1.50. Beginning retained earnings totaled $40 million.
• In March 2017, Fun City issued 2 million common shares at a price of $2 per share.
• In May, the company declared and distributed a 10% stock at a time when Fun
City's common shares had a fair value of $3 per share.
• Then in October, Fun City's stock price dropped to $1 per share and the company executed a 1-for-2 stock split.
• For the year, Fun City earned net income of $26 million and declared cash dividends of $17 million.
Determine what Fun City should report for shareholders' equity at December 31, 2017.
Journal entries are not required.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...