Max Corporation is a hardware store chain operating in the Atlantic provinces. The following selected accounts appear in the ledger of Max Corporation on June 1, 2015, the beginning of the current fiscal year:
$2.25 preferred shares (1,000,000 shares authorized,
75,000 shares issued and outstanding) ............................. $ 3,750,000
Common shares (unlimited authorized,
3,054,930 shares issued and outstanding) ........................... 10,845,040
Retained earnings ....................................................... 3,076,400
Max Corporation does not use dividend accounts. During the year, the corporation completed the following transactions that affected its shareholders' equity.
Jun. 15. Split the common shares 3 for 1.
Jul. 30. Sold 11,000 preferred shares for $575,000.
Dec. 1. Declared semiannual dividends of $1.125 on the preferred shares and $0.12 on the common shares to shareholders of record on December 31, payable on January 31.
Jan. 1. Repurchased and retired 540,350 common shares at $4 per share
31. Paid the cash dividends.
May 31. Declared semiannual dividends of $1.125 on the preferred shares and $0.13 on the common shares to shareholders of record on June 30, payable on July 30.
31. Recorded the closing entry for the income for the year of $4,785,029.
Instructions
1. Journalize the entries to record the transactions.
2. Prepare the Shareholders' Equity section of the statement of financial position as at May 31, 2016.
3. Calculate basic earnings per share for the year ended May 31, 2016.