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Mana Inc. had the following balances in its shareholders' equity at the beginning of the current...

Mana Inc. had the following balances in its shareholders' equity at the beginning of the current year (January 1, 2021):

Preferred shares ($ 1.50, cumulative*, 100,000 shares authorized, 5,000 shares issued) .................................................... $ 25,000

Common shares unlimited shares authorized, 8,000 shares issued ................ 160,000

Retained earnings............................................................................................... 92,000

Total shareholders' equity ................................................................................. $ 277,000 *two years of dividends are in arrears.

During the year ended December 31, 2021, the following transactions took place: 1. On January 1, issued 9,000 common shares at $ 18 per share. 2. On July 1, declared a 10% stock dividend on the common shares, market price $ 18.50 per share. The dividend is to be paid on August 15 to shareholders of record on July 31. 3. On August 15, the company paid the stock dividend. 4. On September 15, Ryder’s board of directors declared a 4-for-1 stock split. During the year, the company had a profit of $ 85,000. Instructions

a) Prepare the journal entries to record the above transactions. Closing entries are not required.

b) Prepare a statement of changes in shareholders’ equity for 2021.

c) Prepare the shareholders’ equity section of the balance sheet at December 31, 2021.

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ekkarill92 answered 2 years ago
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