Reference no: EM132890394
Question - Outdoor Adventures Ltd.'s shareholders' equity section at December 31, 2019 appears below: Shareholders' equity
Common shares, no par value, 65,000 shares issued and outstanding $725,000
Retained earnings 25,000
Total shareholders' equity $850,000
On June 30, 2020, the board of directors of Outdoor Adventures Ltd. declared a 15% stock dividend, payable on July 31, 2020, to shareholders of record on July 15, 2020. The fair market value of Outdoor Adventures Ltd.'s shares on June 30, 2020 was $12 per share.
On December 1, 2020, the board of directors declared a 4-for-1 stock split effective December 15, 2020. Outdoor Adventures Ltd.'s shares were selling for $10 on December 1, 2020, before the stock split was declared. Net Income for 2020 was $150,000 and there were no cash dividends declared.
Required -
a) Prepare the journal entries (no explanations required) on the appropriate dates to record the stock dividend and the stock split. If no journal entry is required, indicate so on the appropriate date.
b) Fill in the amount that would appear in the shareholders' equity section for Outdoor Adventures Ltd. at December 31, 2020, for each of the following items
1. Common Shares
2. Number of shares outstanding
3. Retained Earnings
4. Total shareholders' equity