Reference no: EM132774683
PRIMA Inc's stockholders' equity accounts, as of January 1, 2020, are as follows:
Ordinary share, $ 10 par value (75,000 shares authorized, And outstanding) $ 750,000
Ordinary share premium of 200,000
Retained Earnings 540,000
The following selected transactions occurred during this year:
- 15. Jan Declared a cash dividend of $ 2 per share for ordinary share. dividends are recorded on January 31st and will be paid on February 15th
- Feb. 15 Dividends declared on January 15 are paid
- April 15 Declared a 10% share dividend to shareholders, the market price of the shares is $ 15 per share.
- May 15 Issued share certificate for dividends declared on April 15th.
- 1. July announced the stock split for 1 share to 2 shares, the par value for new shares to be $ 5 per share.
- 30. Des. Announced to shareholders a cash dividend of $ 0.60 per share.
- 31. Net income for the period, $ 260,000.
- 31. Closed net income account and two dividend accounts to Retained Earnings
Instructions
Problem a. Enter the balance as of January 1 into account T for the shareholder equity account mentioned above. And set up a T account for the following accounts:
Share Ordinary; Premium Share Ordinary; Distributable Dividend Share; Dividend Share; Cash Dividend; Retained Earning;
Problem b. Make a journal entry to record the transactions above, and transfer it to the 6 selected accounts.
Problem c. Prrepare the Retained Earning Statement for the year ended 31 December 2020
Problem d. Prepare the Shareholders' Equity section on the balance sheet as of December 31, 2020.
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