AIM Inc. showed the following equity account balances on the December 31, 2019, balance sheet: Common shares,
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Question:
AIM Inc. showed the following equity account balances on the December 31, 2019, balance sheet:
Common shares, unlimited authorized shares, 820,000 shares issued and outstanding | $ | 6,478,000 |
Retained earnings | 2,123,600 | |
During 2020, the following selected transactions occurred:
Feb. | 10 | Repurchased and retired 159,000 common shares at $10.00 per share; this is the first retirement recorded by AIM. | |
May | 15 | Declared a 2:1 share split to shareholders of record on June 1, distributable June 15. | |
Dec. | 1 | Declared a 10% share dividend to shareholders of record on December 10, distributable December 20. The market prices of the shares on December 1, December 10, and December 20 were $6.00 $7.10, and $5.50, respectively. | |
20 | Distributed the share dividend declared December 1. | ||
31 | Closed the credit balance of $801,839 in the Income Summary account. |
Required:
a.Journalize the transactions above (assuming the retirements were the first ever recorded by AIM Inc.). The company does not use a share dividends account.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
b.Prepare the equity section on the December 31, 2020, balance sheet.
Related Book For
Fundamental Accounting Principles Volume II
ISBN: 978-1260305838
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
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