Part A

Fun-Mart Inc. has 150,000 common shares issued at $10 each, and a balance in retained earnings of $200,000 as of December 31, 2019. (Total Shareholders equity is $1,700,000)

Required:

Journalize these transactions:

• May 15, 2020 - 10,000 common shares were repurchased at $8.00 each.
• August 15, 2020 20,000 common shares were repurchased at $11.50 each.
• December 1, 2020 A 10% stock dividend was declared on the remaining common shares. Market Price was $12.
• December 15, 2020 the stock dividend was distributed to the common shareholders.
• Bonus Question (2 extra marks): Compute the Weighted Average # of common shares outstanding in 2020. (Hint: 15 days count as month.)

Part B

Tahoe Construction Inc. purchased 1,000 common shares of Fun-Mart Inc. on October 1, 2021 at $15 per share, as short-term investment. On December 31, 2021, Fun-Mart Inc.s shares trade at $14.5 per share.

Required:

Provide the journal entries that Tahoe Construction Inc. will make for this investment on October 1 and December 31, 2021.