Reference no: EM132909977
Question - Walden Extreme Corp. reported the following amounts in the shareholders' equity section of its December 31, 2019 Statement of Financial Position:
Preferred shares, 8% cumulative (10,000 shares auth, 2,000 shares issued) $4,000,000
Common shares (unlimited authorized, 105,000 issued) 15,000,000
Contributed surplus 55,000
Retained earnings 7,895,000
Accumulated other comprehensive income 125,000
Total $27,075,000
During 2020, the company had the following transactions that affect shareholders' equity, in sequential order (the order that they happened).
a. Bought back and retired 5,000 common shares. The market price for common shares was $153/sh.
b. Issued a 4-for-1 common stock split. Just before the split, the market price was $158.
c. Declared and issued a 20% common stock dividend. No other dividends were declared for the year. Market price was $38 per common share at the time.
d. Bought back and retired 15,000 common shares. Market price was $41 per common share at the time.
The contribution surplus arose from next excess of proceeds over cost on a previous cancellation of common shares. Net income for 2020 was $1,175,000.
Required - Prepare all the necessary journal entries associated with the above transactions. Prepare the December 31, 2020 shareholders' equity section of the Statement of Financial Position (exact same format as above, including shares outstanding).