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Develop Shareholders Equity section of balance sheet

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Reference no: EM132930099

Question - The Shareholders' Equity category of Squigle Company's balance sheet as of January 1, 2021, appeared as follows:

Common stock, 40,000 no par shares issued and outstanding $500,000

Retained earnings 400,000

Total shareholders' equity $900,000

The following transactions occurred during 2021:

a. Declared a 15% stock dividend to common shareholders on January 15. At the time of the dividend, the common shares were selling for $30 per share. The stock dividend was to be issued to shareholders on February 14, 2021.

b. Distributed the stock dividend to the shareholders on February 14, 2021.

Required -

1. Record the 2021 transactions in journal form.

2. Develop the Shareholders' Equity section of Squigle Company's balance sheet as of February 14, 2021, after the stock dividend was issued.

3. What effect did these transactions have on total shareholders' equity?

Reference no: EM132930099

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