Arcus Development Inc.’s equity section on the December 31, 2022, balance sheet showed the following information:

On January 15, 2023, the company’s board of directors declared a 15% share dividend to the shareholders of record on January 20 to be distributed on January 30. The market prices of the shares on January 15, 20, and 30 were $18.90, $17.00, and $17.95, respectively.

Required
1. Prepare the required entries for January 15, 20, and 30.
2. Prepare the equity section on the January 31, 2023, balance sheet, assuming profit earned during January 2023 was $597,500.

Analysis Component:
What effect did the share dividend have on the market price of Arcus’s shares and why?

Transcribed Image Text:

Common shares, unlimited shares authorized, 210,000 shares issued and outstanding........ Retained earnings........... $3,360,000 575,000