On January 1, 2015, Stengel Corporation, a publicly traded company, had these shareholders' equity accounts: Common shares

Question:

On January 1, 2015, Stengel Corporation, a publicly traded company, had these shareholders' equity accounts:

Common shares (unlimited number of shares authorized, 75,000 issued) ......$1,700,000

Retained earnings ...........................................................................900,000

Accumulated other comprehensive loss ..................................................125,000

During the year, the following transactions occurred:

Feb. 1 Declared a $1 per share cash dividend to shareholders of record on February 15, payable March 1.

Apr. 1 Effected a 3-for-1 stock split. On April 1, the share price was $36.

July 1 Declared a 5% stock dividend to shareholders of record on July 15, distributable July 31. On July 1, July 15, and July 31, the share prices were $14, $13.50, and $13.75, respectively.

Dec. 31 Determined that profit for the year was $400,000.

Instructions

(a) Record the above transactions, including any entries required to close dividends and profit to Retained Earnings.

(b) Open T accounts as required and post to the shareholders' equity accounts.

(d) Prepare the shareholders' equity section of the statement of financial position at December 31.

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...