Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
AIM Inc. showed the following equity account balances on the December 31, 2019, balance sheet: Common shares, unlimited authorized shares, 861,000 shares issued and outstanding
AIM Inc. showed the following equity account balances on the December 31, 2019, balance sheet:
Common shares, unlimited authorized shares, 861,000 shares issued and outstanding | $ | 7,404,600 |
Retained earnings | 2,144,800 | |
During 2020, the following selected transactions occurred:
Feb. | 10 | Repurchased and retired 163,800 common shares at $10.00 per share; this is the first retirement recorded by AIM. | |
May | 15 | Declared a 2:1 share split to shareholders of record on June 1, distributable June 15. | |
Dec. | 1 | Declared a 10% share dividend to shareholders of record on December 10, distributable December 20. The market prices of the shares on December 1, December 10, and December 20 were $6.00 $6.70, and $5.00, respectively. | |
20 | Distributed the share dividend declared December 1. | ||
31 | Closed the credit balance of $777,784 in the Income Summary account. |
Required: a. Journalize the transactions above (assuming the retirements were the first ever recorded by AIM Inc.). The company does not use a share dividends account. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
b. Prepare the equity section on the December 31, 2020, balance sheet.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started