Prepare the journal entries

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Question - The shareholders' equity of Saturn Corporation as of December 31, 2013, follows:

Preferred shares, $4, noncumulative 20,000 shares authorized, 4,000 shares issued $200,000

Common shares, unlimited shares authorized, 100,000 shares issued 1,000,000

Common shares, 50000 class B, authorized, 20000 issued 250000

Total contributed capital 1450,000

Retained earnings 1 616,900

Total shareholders' equity $3,066,900

Saturn Corporation completed the following transactions during 2014:

Feb. 6 Declared the required annual cash dividend on preferred shares and a $60000 cash dividend on the common shares. The rate of dividend will remain same for both classes of shares.

Feb. 26 Paid the cash dividend that was declared on February 6.

Jun. 4 Purchased 4,000 of its own class A common shares for $15.25 per share.

Jul. 5 Distributed a 2-for-1 stock split on the class B common shares.

Dec. 31 Closed out the income summary account with a credit balance of 148,000.

Required - Prepare the journal entries and the shareholders' equity section of the balance sheet of Saturn Corporation as of December 31, 2014.

Reference no: EM132771143

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