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On December 31, 2017, Vernon Vacations Inc. reported the following shareholders equity: Preferred shares, unlimited authorized, $0.50 cumulative dividend, 200,000 shares issued and outstanding, dividends
On December 31, 2017, Vernon Vacations Inc. reported the following shareholders equity:
- Preferred shares, unlimited authorized, $0.50 cumulative dividend, 200,000 shares
issued and outstanding, dividends have been paid up to date $ 400,000
- Common shares, unlimited authorized, 400,000 shares issued and
outstanding 1,000,000
- Contributed surplus from past retirements of common shares 70,000
- Retained earnings 1,500,000
- Accumulated other comprehensive income 30,000
total: $3,000,000
During 2018, the company reported the following transactions and events:
- On January 1, the company reacquired and retired 1,000 preferred shares at a cost of $6 per share.
- On April 30, the company reacquired and retired 20,000 common shares at a cost of $5 per share.
- On October 31, when the common shares were trading for $7 per share, the company declared and distributed a 10% stock dividend on its common shares.
- On December 15, the company declared a dividend of $1 per common share plus the current years dividend on the preferred shares. Both dividends were to be paid on January 1, 2019, to shareholders of record on January 5, 2019.
- The company reported net income for the year of $850,000 and negative other comprehensive income for the year of $50,000.
Required:
- Provide journal entries to record all the transactions set out above.
- Prepare, in good form, the shareholders equity section of the companys statement of financial position as at December 31, 2018.
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