At December 31, 2013, Lake Air Mall Inc. reported shareholders' equity as follows: Common shares, 500,000 shares

Question:

At December 31, 2013, Lake Air Mall Inc. reported shareholders' equity as follows:
Common shares, 500,000 shares authorized, 300,000 shares issued..... $ 870,000
Retained earnings .................................................................................... 680,000
..................................................................................................... $1,550,000
During 2014, Lake Air Mall completed these transactions (listed in chronological order):
a. Declared and issued a 5% stock on the outstanding shares. At the time, Lake Air Mall shares were quoted at a market price of $10 per share.
b. Issued 20,000 common shares at the price of $12 per share.
c. Net income for the year, $320,000.
d. Declared cash dividends of $100,000.
Requirement
Prepare Lake Air Mall's statement of changes in shareholders' equity for 2014, using the format of Exhibit 11-2 (p. 531) as a model.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...