Chapter 6
Corporations: Contributed Capital and Dividends
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The shareholders’ equity of East West Corporation at January 1, 2016 was as follows.
East West Corporation
Shareholders' Equity
As at January 1, 2016
Share Capital
Preferred Shares, $5, non-cumulative, 200,000 authorized,
1,000 issued and outstanding
$100,000
Common Shares, unlimited authorized, 30,000 issued
and outstanding
1,500,000
Total Share Capital
1,600,000
Retained Earnings
1,970,000
Total Shareholders’ Equity
$3,570,000
The following transactions occurred in 2016.
Jan 15 The Board decided to declare a total cash dividend of $120,000 to common and
preferred shareholders.
Jan 28 Date of record of dividend.
Feb 10 Paid the cash dividend declared on January 15.
Nov 30 Declared a 20% stock dividend to common shareholders. Current market price
was $55.
Dec 12 Distributed the stock dividends.
EastWest Corporation generated a $980,000 net income during the year. The company uses the
cash and stock dividends method to record dividends.
