Reference no: EM132514043

Question - Moose Valley Makeup Company has a December 31 year-end and has been in operation for 10 years. On January 1, 2019, the equity section of the company is:

Contributed capital:

Common Shares, unlimited shares authorized 8,000 shares, issued and outstanding $ 240,000.00

Retained earnings 78,000.00

Total Equity $ 318,000.00

Step 1: Moose Valley decides to repurchase and retire 1000 shares on May 1 and purchases the shares for $25 that day. Prepare the appropriate journal entry to record this transaction.

Step 2: On October 10, the Board of Directors decides to declare a 10% share dividend to shareholders of record on October 20, to be paid on October 31. The market price for the shares is $12.00 on October 10, 13.50 on October 20 and $12.50 on October 31. Prepare required journal entries for these transactions.

Step 3: The Net income after taxes of the company for 2019 is $46,000. Recognizing this and the stock dividend, prepare the Equity section of Moose Valley Makeup Company on December 31, 2019.

Step 4: Calculate the earnings per share.