Question

The balance sheet for Umi Sustainable Seafood Inc. reported the following components of equity on December 31, 2017:

Common shares, unlimited shares authorized,     19,200 shares issued and outstanding	$	360,000
Retained earnings		208,000
Total equity	$	568,000

In 2018, Umi had the following transactions affecting shareholders and the equity accounts:

Jan.   5	The directors declared a $3.80 per share cash dividend payable on Feb. 28 to the Feb. 5 shareholders of record.
Feb. 28	Paid the dividend declared on January 5.
July    6	Sold 850 common shares at $37.60 per share.
Aug. 22	Sold 1,350 common shares at $27.80 per share.
Sept. 5	The directors declared a $3.80 per share cash dividend payable on October 28 to the October 5 shareholders of record.
Oct. 28	Paid the dividend declared on September 5.
Dec. 31	Closed the $346,400 credit balance in the Income Summary account.
31	Closed the Cash Dividends account.

The balance sheet for Umi Sustainable Seafood Inc. reported the following components of equity on December 31, 2017:

Common shares, unlimited shares authorized,     19,200 shares issued and outstanding	$	360,000
Retained earnings		208,000
Total equity	$	568,000

Required: 1. Prepare journal entries to record the transactions and closings for 2018. The company uses a cash dividends account to record declared dividends. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1.Record the dividend declared on 19,200 outstanding shares. 2.Record cash dividend paid. 3.Record the issuance of common shares. 4.Record the issuance of common shares. 5.Record the dividend declared on 21,400 outstanding shares. 6.Record cash dividend paid. 7.Record to close the income summary account. 8.Record to close the cash dividend account 2. Prepare a statement of changes in equity for the year ended December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.) UMI SUSTAINABLE SEAFOOD INC. Statement of Changes in Equity For Year Ended December 31, 2018 Common Shares Retained Earnings Total Equity Balance, January 1 Balance, December 31

3. Prepare the equity section of the corporation’s balance sheet as of December 31, 2018. (Enter all amounts as positive values.)

	UMI SUSTAINABLE SEAFOOD INC. Equity Section of the Balance Sheet December 31, 2018 Contributed capital: Total equity

Answer 1

1. Journal Entry in the books of UMI SUSTAINABLE SEA FOOD INC.
Date	Detail	Debit	Credit
05-Jan	Retained Earning	$72,960.00
	Dividend payable		$72,960.00
	( Being $3.80/ Share Dividend declared on 19200 Share)
28-Feb	Dividend payable	$72,960.00
	Cash		$72,960.00
	Being Dividend Paid
06-Jul	Cash	$31,960.00
	Common share		$31,960.00
	Being 850 Common shares sold, @ $ 37.60
22-Aug	Cash	$37,530.00
	Common share		$37,530.00
	Being 1350 Common shares sold, @ $ 27.80
05-Sep	Retained Earning	$81,320.00
	Dividend Declared		$81,320.00
	( Being $3.80/ Share Dividend declared on 21400 Share)
28-Feb	Dividend payable	$81,320.00
	Cash		$81,320.00
	Being Dividend Received
2. UMI SUSTAINABLE SEAFOOD INC.
Statement of changes in Equity
For the Year Ended Dec 31, 2018
		Common Share	Retained Earning	Total Equity
	Balance on Jan, 1	$360,000.00	$208,000.00	$568,000.00
	05Jan , Dividend declared		-$72,960.00	-$72,960.00
	06 July, Common Share Sold	$31,960.00		$31,960.00
	22 August, Common Share sold	$37,530.00		$37,530.00
	05 Sep, Dividedn Declared		-$81,320.00	-$81,320.00
	Balance on Dec, 31	$429,490.00	$53,720.00	$483,210.00
3. UMI SUSTAINABLE SEAFOOD INC.
Equity Section of Balance sheet
31-Dec-18
Contributed Capital
Common Share		$42,490,000.00
Retained Earning		$53,720.00
		$42,543,720.00