Solution-Question - Explain the transactions

Question - Explain the transactions

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Question - Explain the following transactions

Dec 1: Complete Tire repurchased and cancelled 25,000 of its common shares @ $2.25 per share. All 100,000 common shares outstanding prior to this transaction were issued on Jan. 1, 2020, when the company commenced operations. There have been no other common share transactions since Jan. 1, 2020 (cheque 300). There is no GST paid on this transaction. Payment is made to Complete Tire's broker, TD bank.

Dec 31: Declared total cash dividends of $11,000. When Complete Tire commenced operation on January 1, 2020, in addition to the 100,000 common shares issued at that time (unlimited authorized), there were 2,000 $7 cumulative preferred shares issued (10,000 authorized). This is the first dividend declared by Complete Tire. Note: Refer to the Dec. 1 transaction re: repurchase of 25,000 common share)

Dec 31: Complete Tire Inc. declares a 50% common stock dividend. The stock has a market value of $2.25 per share on the dividend declaration date. Shareholders did not have the option to take the dividend in cash.

Reference no: EM132925304

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Question - Explain the transactions

Reference no: EM132925304

Reference no: EM132925304

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