Fun City Inc. ended 2013 with 8 million common shares issued and outstanding. The average issue price
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• In March 2014, Fun City issued 2 million common shares at a price of $2 per share.
• In May, the company distributed a 10% stock dividend at a time when Fun City's common shares had a fair value of $3 per share.
• Then in October, Fun City's stock price dropped to $1 per share and the company executed a 1-for-2 stock split.
• For the year, Fun City earned net income of $26 million and declared cash dividends of $17 million.
Determine what Fun City should report for shareholders' equity at December 31, 2014. Journal entries are not required.
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
Financial Accounting
ISBN: 978-0133472264
5th Canadian edition
Authors: Charles Horngren, William Thomas, Walter Harrison, Greg Berberich, Catherine Seguin
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