AIM Inc. showed the following equity account balances on the December 31, 2019, balance sheet: Common shares, unlimited authorized shares, 697,600 shares issued and outstanding Retained earnings $6,208,640 2,321,700 During 2020, the following selected transactions occurred: Feb. 10 Repurchased and retired 157,900 common shares at $10.00 per share; this is the first retirement recorded by AIM. May 15 Declared a 2:1 share split to shareholders of record on June 1, distributable June 15. Dec. 1 Declared a 10% share dividend to shareholders of record on December 10, distributable December 20. The market prices of the shares on December 1, December 10, and December 20 were $6.00 $6.60, and $6.60, respectively. 20 Distributed the share dividend declared December 1. 31 Closed the credit balance of $946,200 in the Income Summary account. Required: a. Journalize the transactions above (assuming the retirements were the first ever recorded by AIM Inc.). The company does not use a share dividends account. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
AIM Inc. showed the following equity account balances on the December 31, 2019, balance sheet: Common shares, unlimited authorized shares, 697,600 shares issued and outstanding Retained earnings $6,208,640 2,321,700 During 2020, the following selected transactions occurred: Feb. 10 Repurchased and retired 157,900 common shares at $10.00 per share; this is the first retirement recorded by AIM. May 15 Declared a 2:1 share split to shareholders of record on June 1, distributable June 15. Dec. 1 Declared a 10% share dividend to shareholders of record on December 10, distributable December 20. The market prices of the shares on December 1, December 10, and December 20 were $6.00 $6.60, and $6.60, respectively. 20 Distributed the share dividend declared December 1. 31 Closed the credit balance of $946,200 in the Income Summary account. Required: a. Journalize the transactions above (assuming the retirements were the first ever recorded by AIM Inc.). The company does not use a share dividends account. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Hh.81.
Transcribed Image Text:No
1
2
3
4
5
Date
February 10, 2020 Retained earnings
Common shares
Cash
May 15, 2020
Answer is complete but not entirely correct.
December 01, 202 Retained earnings
No journal entry required
Common share dividends distributable
December 20, 202 Common share dividends distributable
Retained earnings
Total equity
General Journal
Common shares
December 31, 202 Income summary
Retained earnings
b. Prepare the equity section on the December 31, 2020, balance sheet.
AIM INC.
Equity Section of Balance Sheet
December 31, 2020
Contributed capital:
Common shares, unlimited shares authorized, 1,187,340 shares issued and outstanding
✓
✓
✓
✓
> Answer is complete but not entirely correct.
✓
Debit
1,405,310 x
173,690 X
480,333 x
480,333
946,200
IS
5,283,663
✓2,613,877
7,897,540
Credit
1,579,000✔✔
480,333 x
480,333 x
946,200
Transcribed Image Text:AIM Inc. showed the following equity account balances on the December 31, 2019, balance sheet:
Common shares, unlimited authorized shares, 697,600 shares
issued and outstanding
Retained earnings
$6,208,640
2,321,700
During 2020, the following selected transactions occurred:
Feb.10 Repurchased and retired 157,900 common shares at $10.00 per share; this is the first retirement recorded by AIM.
May 15 Declared a 2:1 share split to shareholders of record on June 1, distributable June 15.
Dec. 1 Declared a 10% share dividend to shareholders of record on December 10, distributable December 20. The market
prices of the shares on December 1, December 10, and December 20 were $6.00 $6.60, and $6.60, respectively.
20 Distributed the share dividend declared December 1.
31 Closed the credit balance of $946,200 in the Income Summary account.
Required:
a. Journalize the transactions above (assuming the retirements were the first ever recorded by AIM Inc.). The company does not use a
share dividends account. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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