Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Record stock dividends splits, and reacquisition of shares. Show impact of transactions on accounts per P14.4B (L01, 2) AP The following shareholders' equity accounts are

image text in transcribed
Record stock dividends splits, and reacquisition of shares. Show impact of transactions on accounts per P14.4B (L01, 2) AP The following shareholders' equity accounts are reported by Talty Inc. on January 1: Common shares (unlimited authorized, 500,000 issued) $4,000,000 Preferred shares ($9 noncumulative, convertible, 100.000 authorized, 4,000 issued) 600,000 Contributed surplus--reacquisition of common shares 2,000 Retained earnings 1,958,000 The following selected transactions occurred during the year: Jan. 17 Issued 50,000 common shares at $10 per share. Feb. 27 Reacquired 20.000 common shares at $12 per share. Apr. 14 Split the common shares 2 for 1 when the common shares were trading at $20 share. June 25 Reacquired 500 preferred shares at $145 per share. Reacquired 100,000 common shares for $11 per share. Oct. 17 Declared a common stock dividend distributable on December 3 to shareholders of record on November 14. On October 17, the fair value of the common shares was $10. Dec. 3 Distributed the stock dividend declared on October 17. On December 3, the fair value of the common shares was $12.50. Instructions a. Prepare journal entries for the transactions, b. Show how each class of shares will be presented in the shareholders' equity section of the balance sheet at December 31 Taking it further Provide possible reasons why Talty split the common shares and issued a stock dividend. Aug. 16

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting For Financial Instruments

Authors: Cormac Butler

1st Edition

0470699809, 978-0470699805

More Books

Students also viewed these Accounting questions

Question

Identify some of the global differences when negotiating.

Answered: 1 week ago

Question

Describe the team performance model.

Answered: 1 week ago