Moroccan Marble Company, a public company, produces custom marble furniture. On January 1, 2020, it had the following balances in shareholders’ equity: Shareholders’ Equity Contributed Capital Share Capital $2.50 Noncumulative preferred shares, 100,000 shares authorized, 2,000 shares issued $ 50,000 Common shares, unlimited number authorized, 20,000 shares issued 100,000 Total Contributed Capital $150,000 Retained Earnings 456,000 Total Shareholders’ Equity $606,000 The company has a corporate tax rate of 25%. Below are selected transactions for the fiscal year ended December 31, 2020: Jan. 15 Reacquired 5,000 common shares for $4.00 per share. Mar. 20 Issued 25,000 common shares in exchange for equipment. The fair market value of the equipment was $160,000. On this day, the common shares were trading at $7 per share. Aug. 10 Split the common shares 2 for 1. Oct. 22 The board of directors declared a cash dividend of $8,000 to be paid on December 10 to the shareholders of record on November 20. Dec. 10 Paid the cash dividend. Instructions: Prepare the necessary journal entries to record the above transactions for 2020.
1. Moroccan Marble Company, a public company, produces custom marble furniture. On January 1, 2020, it had the following balances in shareholders’ equity:
Shareholders’ Equity
Contributed Capital
Share Capital
$2.50 Noncumulative
Common shares, unlimited number authorized, 20,000 shares issued 100,000
Total Contributed Capital $150,000
Retained Earnings 456,000
Total Shareholders’ Equity $606,000
The company has a corporate tax rate of 25%.
Below are selected transactions for the fiscal year ended December 31, 2020:
Jan. 15 Reacquired 5,000 common shares for $4.00 per share.
Mar. 20 Issued 25,000 common shares in exchange for equipment. The fair market value of the equipment was $160,000. On this day, the common shares were trading at $7 per share.
Aug. 10 Split the common shares 2 for 1.
Oct. 22 The board of directors declared a cash dividend of $8,000 to be paid on December 10 to the shareholders of record on November 20.
Dec. 10 Paid the cash dividend.
Instructions:
Prepare the necessary
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