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What effect did the share dividend

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Reference no: EM132551014

Question - Share dividends

Arcus Development Inc's equity section on the December 31, 2019 , balance sheet showed the following information:

Common shares, unlimited shares authorised, 210,000 shares issued and outstanding $3,360,000

Retained earnings 575,000

On January 15, 2020, the company's board of directors declared a 15% share dividend to the share-holders of record on January 20 to be distributed on January 30. The market prices of the shares on January 15, 20, and 30 were $18.90, $17.00, and $17.95 respectively.

Required -

1. Prepare the required entries for January 15, 20 and 30.

2. Prepare the equity section on the January 31, 2020, balance sheet, assuming profit earned during January 2020 was $597,500

Analysis Component: What effect did the share dividend have on the market price of Arcus's shares and why?

Reference no: EM132551014

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