Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Wilma Corporation reported the following amounts in its shareholders equity section on the December 31, 2014 balance sheet: Preferred shares, $5 dividend, 10,000 shares authorized,
Wilma Corporation reported the following amounts in its shareholders equity section on the December 31, 2014 balance sheet:
Preferred shares, $5 dividend, 10,000 shares authorized, 2,500 shares issued | $180,000 |
Common shares, 100,000 authorized, 25,000 issued | 100,000 |
Contributed Surplus' | 122,000 |
Retained Earnings | 238,000 |
Total Shareholders Equity | $640000 |
During 2015, the following transactions impacted shareholders equity: |
|
- Jan 15: Purchased 6000 shares of its own common shares for $26 per share and retired them
- Feb 1: Issued 1,500 preferred shares at $81 per share
- Nov 1: Declared a 10% stock dividend on the outstanding common shares when they were trading at $31 per share.
- Dec 31: Declared the annual 2015, $5 per share preferred share dividend and a $3 per share dividend on the common shares. These dividends are payabIe in 2016.
Required:
- Prepare journal entries for each of the transactions in 2015 (11 marks)
- Assume 2015 net income was $310,000, what is the ending balance of Retained Earnings for year ended December 31, 2015? (4 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started