The following shareholders’ equity accounts are reported by Talty Inc. on January 1:

The following selected transactions occurred during the year:

Instructions
(a) Prepare a chart that shows for each class of shares (1) number of shares, (2) cost of shares, and (3) average cost per share. Enter the January 1 data into the chart.
(b) Prepare journal entries for the transactions. Update the chart in (a) as required for the transactions. After each transaction, determine the number issued, total cost, and average cost per share.
(c) Show how each class of shares will be presented in the shareholders’ equity section of the balance sheet at December 31.

TAKING IT FURTHER Provide possible reasons why Talty split the common shares and issued a stock dividend.