Reference no: EM133087360

Question - In its initial public offering during 2015?, Healthy Food issued 600,000 common shares for $7.00 per share. Over the next? year, Healthy Food's share price increased and the company issued 350,000 more shares at an average price of $ 9.00 . During the five years from 2016 through 2020?, Healthy Food earned net income of $ 1,260,000 and declared and paid cash dividends of $ 240,000. A 5 % stock dividend was distributed to the shareholders in 2020 on the shares outstanding. The market price was $ 11.00 per share when the stock dividend was distributed. At December? 31, 2020?, the company has total assets of $ 13,000,000 and total liabilities of $ 5,275,000.

As of December 31, 2020, prepare a detailed computation of the number of common shares outstanding and the retained earnings closing balance.