On June 30, 2014, Utusivik’s equity section was as follows:

During the year ended June 30, 2015, Utusivik Inc. (Utusivik) had the following equityrelated transactions and economic events.
i. On August 1, 2014 Utusivik issued 500,000 common shares for \($22\) each.
ii. On November 30, 2014 Utusivik issued 50,000 preferred shares for \($80\) each.
iii. On December 31, 2014 Utusivik declared and paid a dividend of \($0.75\) per common share.
iv. On April 30, 2015 Utusivik declared a three-for-one stock split.
v. On June 29, 2015 Utusivik obtained the rights to a patent in exchange for 60,000 Utusivik common shares. The market value of Utusivik stock on June 30, 2015 was \($16\) per share.
vi. On June 30, 2015 Utusivik declared and paid a dividend to preferred shareholders of \($1.50\) per share.
vii. On June 30, 2015 Utusivik declared and paid a dividend of \($0.85\) per common share.
viii. Net income for 2015 was $4,500,000.
ix. Comprehensive income for 2015 was 4,600,000.

Required:

a. Prepare the journal entries required to record items (i) through (vii).

b. Prepare the equity section of Utusivik’s balance sheet on June 30, 2015 and provide comparative information for June 30, 2014.

c. Show the equity section of Utusivik’s balance sheet as it would have been reported in the June 30, 2014 annual report. Explain the difference between the equity section for 2014 as reported in the 2015 annual report versus the 2014 annual report.

d. Calculate earnings per share and return on shareholders’ equity for the year ended June 30, 2015. If earnings per share for 2014 had been reported as \($1.80\) per share, what amount would be reported for 2014 in the 2015 annual report?

e. How did the stock split affect the performance of Utusivik?

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Preferred shares (500,000 shares authorized, 25,000 outstanding) $2,000,000 Share capital (5,000,000 shares authorized, 1,000,000 outstanding) 8,000,000 Accumulated other comprehensive income Retained earnings 85,000 11,900,000