Reference no: EM133137177
Question - ACME Incorporated, a publicly traded company with a December 31 year end, had the following equity balances at December 31, 2021:
Shareholders' Equity
$5 Preferred Shares, cumulative, 50% participating, 500,000 authorized & outstanding $2,500,000
$4 Preferred Shares, 1:1 Convertible to Class A Common, 350,000 authorized & outstanding 1,500,000
Class A Common Shares, unlimited authorized, 600,000 shares outstanding 3,000,000
Class B Common Shares, unlimited authorized, 125,000 shares outstanding 900,000
Contributed surplus - redemption of $5 preferred shares 50,000
Total paid-in capital $7,950,000
Retained earnings 18,500,000
Accumulated other comprehensive income 875,000
Total shareholders' equity $ 27,325,000
No dividends have been declared for the last two years. During 2022, ACME had the following transactions:
1. January 01, reacquired and cancelled 25,000 Class B Common Shares at $7.00 per share.
2. January 01, reacquired and cancelled 100,000 $5 Preferred Shares at $6.00 per share plus dividends in arrears.
3. March 15, declared and distributed a 5% stock dividend on the Class B common shares when the market value was $9.50 per share.
4. June 30, declared a 2:1 stock split on the Class A common shares.
5. September 01, 50% of the $4 Preferred Shares were converted to Class A Common Shares.
Required - Prepare the required journal entries for the above transactions?