Miss M's Dance Studios Ltd. is a public company, and accordingly uses IFRS for financial reporting. The

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Miss M's Dance Studios Ltd. is a public company, and accordingly uses IFRS for financial reporting. The corporate charter authorizes the issue of up to 1 million common shares and 50,000 preferred shares with a $2 dividend. At the beginning of the December 31, 2014 year, the opening account balances indicated that 25,000 common shares had been issued for $4 per share, and no preferred shares had been issued. Opening retained earnings were $365,000. The transactions during the year were as follows:

Jan. 15 Issued 10,000 common shares at $6 per share.

Feb. 12 Issued 2,000 preferred shares at $60 per share.

June 30 Declared and paid dividend on common shares of $1.50 per share.

Sept. 2 Issued 5,000 common shares in exchange for land valued at $25,000.

Oct. 31 Declared and paid dividend on preferred shares of $2 per share.

Nov. 15 Purchased and retired 500 preferred shares at $62 per share.

Dec. 31 Reported net income of $532,000.

Instructions

(a) Prepare journal entries to record the transactions above.

(b) Prepare the statement of changes in shareholders' equity.

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...
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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-1118300855

10th Canadian Edition Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy

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