Reference no: EM132419640

Problem: During the discussion about financing, Ella mentions that one of her clients, Timothy Hansen has approached her about buying a significant interest in a new club. Having an interested investor sways the three to issue equity securities to provide the financing they need. On July 21, 2016, Mr Hansen buys 90,000 shares at a price of $10 per share.

The club LIfePath Fitness opens on January 12, 2017 and after a slow start begins to produce the revenue desired by the owners. The owners decide to pay themselves stock dividend sinc cash has been less than abundant since they opened their doors. The 10% stock dividend is declared by the owners on July 27, 2017. The market price of the stock is $3 on the declaration date. The date of the record is July 31, 2017 and the issue date is August 15, 2017. By the middle of the fourth quarter of 2017, the cash flow of lifepath fitness has improved to the point that the owners feel ready to pay themselves a cash dividend. They declare a $0.05 cash dividend on December 4, 2017. THe record date is december 14, 2017 and the payment is December 24, 2017.

Required:

Question: Record all the transactions related to the common stock of lifepath fitness during the years 2016 and 2017 (2) indicate how many shares are issued and outstanding after the stock dividend is issued. Please answer the question by provide detail calculation process.