On December 31, 2016, LeBlanc Corporation had the following shareholders' equity accounts: LEBLANC CORPORATION Balance Sheet (partial)
Question:
On December 31, 2016, LeBlanc Corporation had the following shareholders' equity accounts:
LEBLANC CORPORATION
Balance Sheet (partial)
December 31, 2016
Shareholders' equity
Common shares (unlimited number of shares authorized,90,000 issued)............$1,100,000
Retained earnings................................................................................540,000
Total shareholders' equity..................................................................$1,640,000
During the year, the following transactions occurred:
Jan. 15 Declared a $1 per share cash dividend to shareholders of record on January 31, payable February 15.
July 1 Announced a 3-for-2 stock split. The market price per share on the date of the announcement was $15.
Dec. 15 Declared a 10% stock dividend to shareholders of record on December 30, distributable on January 15. On December 15, the market price of each share was $10; on December 30, $12; and on January 15, $11.
31 Determined that profit before income tax for the year was $450,000. The company has a 30% income tax rate.
Instructions
(a) Journalize the transactions and closing entries.
(b) Create general ledger accounts and enter the beginning balances from the December 31, 2016, partial balance sheet. Post the entries in part (a) to the shareholders' equity accounts.
(c) Prepare the shareholders' equity section of the balance sheet at December 31, 2017.
TAKING IT FURTHER
What are the advantages and disadvantages to investors when a company declares a stock dividend or a stock split?
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...
Step by Step Answer:
a GENERAL JOURNAL J1 Date Account Titles Debit Credit Jan 15 Cash Dividends x Common 90000 Dividends Payable 90000 1 90000 Jan31Date of record No entr...View the full answer
Accounting Principles
ISBN: 978-1119048473
7th Canadian Edition Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
