On January 1, 2015, Tarow Corporation had 80,000 common shares, recorded at $600,000, and retained earnings of

Question:

On January 1, 2015, Tarow Corporation had 80,000 common shares, recorded at $600,000, and retained earnings of $1,000,000. During the year, the following transactions occurred:

Apr. 1 Issued 5,000 common shares at $20 per share.

June 15 Declared a cash dividend of $0.25 per share to common shareholders of record on June 30, payable on July 10.

Aug. 21 Declared a 5% stock dividend to common shareholders of record on September 5, distributable on September 20. The shares were trading for $22 a share on August 21, $24 on September 5, and $26 on September 20.

Nov. 1 Issued 3,000 common shares at $25 per share.

Dec. 20 Declared a cash dividend of $0.30 per share to common shareholders of record on December 31, payable on January 10.

Instructions

(a) Record the above transactions for 2015. (Note: Closing entries are not required.)

(b) Open T accounts and post to the shareholders' equity accounts journalized in (a).

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...