After the books have been closed the ledger of Suki #646

After the books have been closed, the ledger of Suki Corporation at December 31, 2014,
contains the following shareholders’ equity accounts:Preferred Shares (10,000 shares issued)
......... $1,100,000Common Shares (400,000 shares issued) ......... 1,850,000Contributed
Capital—purchase of common shares .... 10,000Common Stock dividend distributable .........
110,000Retained Earnings .................. 2,390,000A review of the accounting records reveals the
following:a. Both the common and preferred shares have no par value and unlimited number of
shares authorized.b. The preferred shares are noncumulative with an $11 dividend. The 10,000
shares were issued on January 15, 2012. No dividend was paid to the preferred shareholders in
2012 or 2013.c. The January 1 balance in Retained Earnings was $ 2,250,000.d. On January
15, the firm purchased 20,000 common shares for $4 cash per share and cancelled these
shares.e. On October 1, 100,000 common shares were sold for cash at $5 per share.f. A cash
dividend of $650,000 was declared and properly allocated to Preferred Shares and Common
Shares on November 1.g. On December 31, a 5% stock dividend was declared for common
shares. Requirements1. Calculate the allocation of the cash dividend to preferred and common
shareholders.2. Calculate (a) the initial common share issuing price per share, (b) the net
income, and (c) market price for the common shares on December 31.3. Prepare all necessary
journal entries for Suki Corporation in 2014.4 Prepare a statement of shareholders’ equity for
the year ended December 31, 2014.View Solution:
After the books have been closed the ledger of Suki

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