Question: Required Refer to the equity section above. Assume that the preferred are convertible into common at a rate of eight common shares for each share

Required Refer to the equity section above. Assume that the preferred are convertible into common at a rate of eight common shares for each share of preferred. If 1,000 shares of the preferred are converted into common on April 1, 2014, prepare the entry and describe how this affects the equity section of the balance sheet (immediately after the conversion).
Analysis Component: If you are a common shareholder in this company, and the company plans to pay total cash dividends of $720,000, does it make any difference to you whether the conversion takes place before the declaration?Why?

Walking Bear Resources Inc. Equity Section of the Balance Sheet March 31, 2014 Contributed capital: Preferred shares, $17 cumulative, 2,500 shares authorized, issued, and outstanding Common shares, unlimited shares authorized, S 600,000 960,000 $1,560,000 462,000 $2,022,000 40,000 shares issued and outstanding. Total contributed capital Retained earnings.. Total equity...

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2014 Apr 1 Preferred Shares 240000 Common Shares 240000 To record the conversion of 1000 preferred s... View full answer

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