Fuken Inc had the following balances in its shareholders

equity #651
Fuken Inc. had the following balances in its shareholders’ equity accounts at December 31,
2014:Share CapitalCommon Shares, unlimited number of shares authorized,50,000 shares
issued and outstanding .... $8,000,000Retained Earnings .......... 750,000Total Shareholders’
Equity ........ $8,750,000During 2014, Fuken completed the following selected transactions
related to shareholders’ equity:Mar 15 Purchased and retired 4,500 common shares at $150
per share.Jul 21 Purchased and retired 3,500 common shares at $170 per share.Dec 28
Declared a 2-for-1 stock split effective on this date.Dec 30 Fuken reported net income for the
year of $325,000Requirements1. Prepare journal entries to account for the transactions during
2014.2. Assume that instead of a 2-for-1 split, the board of directors declared a 5% stock
dividend when the market price was $175. The stock dividends were to be distributed on
January 31, 2015. Prepare the journal entry to account for the stock dividend.3. Prepare the
company’s shareholders’ equity section at December 31, 2014 for (a) The stock split (b) The
stock dividend.View Solution:
Fuken Inc had the following balances in its shareholders equity

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