Question

Stake Technology Inc. had the following balances in its equity accounts at December 31, 2014. Common shares, unlimited shares authorized, 50,000 shares issued, and outstanding Retained earnings. $500,000 295,000 During 2015, the following equity transactions occurred: a. September 19: A5% share dividend was declared when the market value was $8 per share to be paid on November 9. b. October 7: The board of directors declared a 3:1 share split on this date. c. November 9: Date of distribution regarding the 5% share dividend. d. December 31: Closed the dividend account. e. December 31: Closed the Income summary account, which has a credit balance of $160,000. a) Prepare journal entries to account for the transactions during 2015. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). General Journal Page GJI Account/Explanation F Debi Credit Date b) Prepare the company's statement of changes in equity for the year ended December 31, 2015. Please make sure your final answer(s) are accurate to the nearest whole number. (select one) Statement of Changes in Equity (select one) CommorRetainecTotal Shares Earnings Equity c) Prepare the company's equity section of the balance sheet for the year ended December 31, 2015. Please make sure your final answer(s) are accurate to the nearest whole number. Stake Technology Inc. Equity Section of the Balance Sheet December 31, 2015 Contributed capital Common shares, unlimited shares authorized: shares issued and outstanding.. Retained earnings.. Total equity...

Answer 1

General Journal
Date	Account/Explanation	LF	Debit	Credit
Sep-19	Retained Earnings Account	Dr		25,000
	To	Dividend Payable Account			25,000
	(Being share dividiend declared @ 5%)
Oct-07	No entry required.
Nov-09	Dividend Payable Account	Dr		25,000
	To	Common Stock				25,000
	(Being share dividend declared settled by issue of
	equity shares)
Dec-31	No entry reqired. Already Closed in the previous entry
Dec-31	Income Summary		Dr		160,000
	To	Retained Earnings Account			160,000
	(Being credit balance in income summary transferred
	to retained earnings)

Stake Technology Inc.
Statement of Changes in Equity
December 31, 2015
Particulars	Common Shares	Retained Earnings	Total Equity
Opening Balance	500,000	295,000	795,000
Less: Dividend Declared	-	(25,000)	(25,000)
Add: Share Dividend issued	25,000	-	25,000
Add: Net Income transferred	-	160,000	160,000
Closing Balance	525,000	430,000	955,000
Calculation of number of shares outstadning at the end
Number of Common shares - Opening	50,000
Add: Number of shares issued in Stock split	100,000
[(50,000 x 3/1)-50,000]
Number of shares after stock split	150,000
Add: Number of shares issued as share dividend	7,500
(25,000/10) x 3/1
Number of Common shares - Closing		157,500
Stake Technology Inc.
Statement of Changes in Equity
December 31, 2015
Particulars	Amount
Contributed Capital
Common shares, unlimited shares authorised:
157,500 shares issued and outstanding:	525,000
Retained Earnings		430,000
Total equity		955,000