Examine Halifax Metal Products Ltd.’s shareholders’ equity information in E14–4. Suppose that on November 14, 2020, Halifax Metal Products Ltd. consolidated its common shares 1 for 2 to increase the market price of its shares that were trading at $6.00 on October 31, 2020.

Required

1. Make the memorandum entry to record the share consolidation.

2. Prepare the shareholders’ equity section of Halifax Metal Products Ltd.’s balance sheet immediately after the share consolidation.

3. What would you expect the market price to be, approximately, after the reverse split?

E14–4

Halifax Metal Products Ltd. reported the following shareholders’ equity at October 31, 2020:

Common shares, unlimited shares authorized, ............... 60,000
shares issued and outstanding ...................................... $150,000
Retained earnings .............................................................. 450,000
Total shareholders’ equity ............................................... $600,000

On November 14, 2020, Halifax Metal Products Ltd. split its common shares 2 for 1.