Reference no: EM132890397
Question - At January 1, 2020, ABC company had 115,342 shares. During the year, they had the following share transactions:
March 1 issue 3,000 shares for $ 6,150 proceeds
September 1 issue 6,258 shares for $ 12,844 proceeds
Stock dividend 4% declared and issued on December 1 (share price was $2.00)
The prior Controller has done no accounting for the stock dividend. The company's current and prior year income tax rate is 24%. Announced tax rate effective January 1, 2019 27%. The prior Controller determined that the impact of this change doesn't need to be accounted for until 2019. In calculating current year income tax expense, no entries were made by the Controller for future income taxes. The future income tax balance at December 31, 2019 was due to claiming capital cost allowance in excess of depreciation in prior years. The future tax balances are not expected to start reversing until after 2021. NOTE: You can calculate the Temporary Difference at 12/31/19 using the tax rate and the balance in the Future Income Tax account) RD will claim the maximum CCA possible. You have determined that amount to be $ 48,200
Required - Prepare the journal entries at Jan 1, 2020 and as at December 31, 2020.
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