Make a Dream Ltd. has the following selected account balances in the ledger as at May 1, 2015, the beginning of the current year:
$3.50 preferred shares (500,000 authorized,
20,000 shares issued and outstanding)................................... $1,250,000
Common shares (unlimited authorized,
800,000 shares issued and outstanding)................................. 9,725,500
Retained earnings..................................................................... 6,356,000
Make a Dream Ltd. uses dividend accounts. During the year, the corporation completed the following transactions that affected its shareholders' equity.
a. Sold 8,000 preferred shares at $30 per share.
b. Declared semiannual cash dividends of $1.75 per preferred share and $1.50 per
common share.
c. Issued 300,000 common shares at $18 per share, receiving cash.
d. Paid the dividend declared in (b).
e. Declared a common share dividend of 6% when the market price of the common share was trading at $21.
f. Issued the share dividend.
g. Declared semiannual cash dividends of $1.75 per preferred share and $1.65 per
common share.
h. Recorded closing entries. The net income for the year was $4,642,000.
Instructions
1. Journalize the entries to record the transactions. Identify each entry by letter.
2. Prepare a statement of changes in equity for the year ended April 30, 2016.
3. Prepare the Shareholders' Equity section of the statement of financial position for Make a Dream Ltd. as at April 30, 2016.
4. Calculate the basic earnings per share for the year ended April 30, 2016, assuming a weighted average number of common shares of 1,033,500.