Reference no: EM132597536

MBA Incorporated's share capital information along with the share transactions for the 2020 year are as follows:

a. Common shares issued at January 1, 2020 were 250,000 shares a book value of $750,000. The common shares have a par value of $3.00 per share.

b. December 31, 2020 a 30% stock dividend was declared.

c. January 20, 2020 a 10% stock dividend was declared.

d. October 9, 2020 25,000 common shares were issued and sold for $5.50 per share.

e. February 15, 2020 100,000 shares were issued and sold for $4.50 per shares.

f. June 30, 2020 a 4 for 1 stock split was done

g. March 29, 2020 issued and sold 25,000 shares for $3.00 per share

Required:

Question 1. What is the book value of the common shares at January 1, 2020?

Question 2. Using the book value of the common shares computed in part 1, prepared a share schedule, in order of date, listing the share transactions for 2020. Use the following column heading: # of Common Shares, Common Shares general ledger account balance and the general ledger account balance for contributed surplus.

Question 3. Prepare the journal entries to record the share transactions listed on the schedule in part 2.

Question 4. The opening contributed surplus general ledger account balance was $150,000, Retained Earnings has an opening balance of $425,000 and the net income for 2020 was $225,000 - Prepare the Shareholders' Equity section of the balance sheet.