Chapter 6
Corporations: Contributed Capital and Dividends
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c) Calculate the ending balance of retained earnings for the two-month period of November
1–December 31, 2016.
AP-14B
(
6
)
On May 31, 2016, Red Synapse Corporation’s shareholders’ equity section shows the following
balances.
Red Synapse Corporation
Shareholders' Equity
As at May 31, 2016
Share Capital
Common shares, unlimited authorized
30,000 shares issued and outstanding
$450,000
Retained Earnings
370,000
Total Shareholders’ Equity
$820,000
Scenario 1
May 31 After preparing the shareholders’ equity section shown above, the
company declared and immediately distributed a 100% stock dividend.
Current market price was $10. The company recorded the stock dividends
by debiting retained earnings.
