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Manitoba Corp., which follows IFRS, reported the following amounts in the shareholders equity section of its December 31, 2019 statement of financial position: $30,000 Preferred shares, S8 cumulative dividend (100,000 shares authorized 50,000 shares issued) Common shares (1,000,000 authorized 250,000 issued) Contributed surplus Retained earnings Total 100,000 145,000 1.900.000 $2.175,000 *The contributed surplus arose from the excess of proceeds over cost on a previous cancellation of common shares. Assume that Net income for 2020 was $0. During 2020, the company had the transactions that affect shareholders' equity answer the following questions using the information given 1. Paid dividend on preferred shares and a $2 per share dividend on common shares. No dividend wore declared in 2018. Board of directors declared dividends on December 15, 2019 The journal entry to account for dividend payment is a. Debit dividends payable 1,300,000 and credit cash 1,300,000 O Debit dividends payable 900,000 and credit cash 900,000 c. Dobit dividends payable 500,000 and credit shareholders equly 500,000 d. Debil dividends declared 900,000 and credit contributed surplus 900,000 2 Repurchased 100 common shares for $45 per share and cancelled them. The journal entry to record this transaction is a. Debit common shares 40, debit retained earnings 4460, credit cash 4500 b. Debit common shares 40 credit cash 40 c. Debit common shares 4500, credit cash 4500 Od. Debit common shares 40. debit contributed surplus 4460, credit cash 4500 3. Issued 1,000 preferred shares at $105 per share (at the beginning of the year). The journal entry to record this transaction is Debil cash 105,000, credit retained earnings 105,000 b. Debit Cash 105,000 credit proferred shares 105,000 c. Debit cash 6,000 credit preferred shares 6.000 Od Debit cash 105,000, credit preferred shares 6,000, credit contributed surplus 90,000 4 Declared a 10% stock dividend on the outstanding common shares when the shares were seling for $35 per here. The journal entry to record this transaction is Debit cash 874,860, credit stock dividends issuable 674,650 Ob Debit retained earnings 875.00, credit stock dividends is able 875,000 Dubit retained earrings 874 660, credit stock dividends issueble 874060 O Debit retained earnings 878,160, credit stock dividends souble 878.150 5. led the stock dividend The journal entry to record this transaction is O Debit to dividendo le 874 000 credit common shares 874660 7. Dividends on preferred shares equal a. 400,000 O b. 40,000 OC. 408,000 Od. None 8. The joumal entry to record dividend declaration on December 31, 2020 is a. Debit retained earnings 274,890, credit dividends payable 274,890 Ob. No journal entry required Oc Debit retained earnings 274,890, credit stock dividends 274,890 Od Debit retained earnings 682,890, credit dividends payable 682,890 Part 2 Show the December 31, 2020 shareholders' equity section (detailed calculation)
