Reference no: EM133155014
Question - The following shareholders' equity accounts are reported by Talty Inc. on January 1: Record stock dividends, splits, and reacquisition of shares. Show impact of transactions on accounts.
Common shares (unlimited authorized, 500,000 issued) $4,000,000
Preferred shares ($9 noncumulative, convertible, 100,000 authorized, 4,000 issued) 600,000
Contributed surplus-reacquisition of common shares 2,000
Retained earnings 1,958,000
The following selected transactions occurred during the year:
Jan. 17 Issued 50,000 common shares at $10 per share.
Feb. 27 Reacquired 20,000 common shares at $12 per share.
Apr. 14 Split the common shares 2 for 1 when the common shares were trading at $20 per share.
June 25 Reacquired 500 preferred shares at $145 per share.
Aug. 16 Reacquired 100,000 common shares for $11 per share.
Oct. 17 Declared a 5% common stock dividend distributable on December 3 to shareholders of record on November 14. On October 17, the fair value of the common shares was $10.
Dec. 3 Distributed the stock dividend declared on October 17. On December 3, the fair value of the common shares was $12.50.
Required -
a. Prepare journal entries for the transactions.
b. Show how each class of shares will be presented in the shareholders' equity section of the balance sheet at December 31.