Reference no: EM132811174
The shareholders' equity of Saturn Corporation as of December 31, 2013, follows:
Preferred shares, $4, noncumulative 20,000 shares
authorized, 4,000 shares issued $ 200,000
Common shares, unlimited shares authorized,
100,000 shares issued 1,000,000
Common shares, 50000 class B, authorized, 20000 issued 250000
Total contributed capital 1450,000
Retained earnings 1 616,900
Total shareholders' equity $3,066,900
Saturn Corporation completed the following transactions during 2014:
- Feb. 6 Declared the required annual cash dividend on preferred shares and a $60000 cash dividend on the common shares. The rate of dividend will remain same for both classes of shares.
- 26 Paid the cash dividend that was declared on February 6.
- Jun. 4 Purchased 4,000 of its own class A common shares for $15.25 per share.
- Jul. 5 Distributed a 2-for-1 stock split on the class B common shares.
- Dec. 31 Closed out the income summary account with a credit balance of 148,000.
Problem 1: Prepare the journal entries and the shareholders' equity section of the balance sheet of Saturn Corporation as of December 31, 2014.