Mana Inc Had the Following Balances in Its Shareholders' Equity at at the Beginning

question 9

Essay

Mana Inc. had the following balances in its shareholders' equity at the beginning of the current year (January 1, 2021):
Preferred shares ($ 1.50, cumulative*, 100,000 *two years of dividends are in arrears.
During the year ended December 31, 2021, the following transactions took place:
1. On January 1, issued 9,000 common shares at $ 18 per share.
2. On July 1, declared a 10% stock dividend on the common shares, market price $ 18.50 per share. The dividend is to be paid on August 15 to shareholders of record on July 31.
3. On August 15, the company paid the stock dividend.
4. On September 15, Ryder's board of directors declared a 4-for-1 stock split.
During the year, the company had a profit of $ 85,000.
Instructions
a) Prepare the journal entries to record the above transactions. Closing entries are not required.
b) Prepare a statement of changes in shareholders' equity for 2021.
c) Prepare the shareholders' equity section of the balance sheet at December 31, 2021.

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Definitions:

Joint Costs

Costs incurred up to the split-off point in the process of producing joint products, which are not identifiable to individual products.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, contributing towards covering fixed costs and profit.

Net Loss

The result when a company's total expenses exceed its total revenues over a specific period, indicating a negative profit.

Opportunity Cost

The cost of missing out on the next best alternative when making a decision.