Question: Mingu Inc had the following balances in its shareholders equity

Mingu Inc. had the following balances in its shareholders' equity accounts at December 31, 2014:
Share Capital
30,000 shares issued and outstanding .... $4,500,000
Retained Earnings .......... 625,000
Total Shareholders’ Equity ........ $5,125,000
Common Shares, unlimited number of shares authorized, during 2014, Mingu completed the following selected transactions related to shareholders’ equity:
Feb 15 Purchased and retired 2,500 common shares at $130 per share.
Jun 28 Purchased and retired 3,500 common shares at $160 per share.
Dec 18 Declared a 3-for-2 stock split effective on this date.
Dec 30 Mingu reported net income for the year of $150,000
1. Prepare journal entries to account for the transactions during 2014.
2. Assume that instead of a 3-for-2 split, the board of directors declared a 5% stock dividend when the market price was $165. The stock dividends were to be distributed on January 15, 2015. Prepare the journal entry to account for the stock dividend.
3. Prepare the company’s shareholders’ equity section at December 31, 2014 for (a) the stock split and (b) the stock dividend.

View Solution:

Sale on SolutionInn
  • CreatedJuly 08, 2015
  • Files Included
Post your question