Question $23$: $(10$ Marks$)-(15$ Minutes$)$

Banana Inc. had the following balances in its shareholders' equity at the beginning of the curre

year $($January $1,2024)$:

During the year ended December $31,2024,$ the following transactions took place:

On January $1,$ issued $9,000$ common shares at $$18$ per share.

On July $1,$ declared a $10\%$ stock dividend on the common shares, market price $$18\mathrm{.}50$ per

share. The dividend is to be paid on August $15$ to shareholders of record on July $31.$

On August $15,$ the company paid the stock dividend.

On September $15,$ the board of directors declared a $4-$for$-1$ stock split.

During the year, the company had a profit of $$85,000.$

Instructions

a$)$ Prepare the journal entries to record the above transactions. Closing entries are not

required.

b$)$ Prepare a statement of changes in shareholders' equity for $2024.$