Charlie Inc

question 33

Short Answer

Charlie Inc. had the following balances in its shareholders' equity at the beginning of the current year: During the year the following transactions took place:
1. Issued 7,000 shares at $20 per share.
2. Declared a 10% stock dividend, market price $21 per share.
3. Paid the stock dividend.
4. Declared a 4 to 1 stock split.
Instructions
a) Prepare the journal entries to record the transactions.
b) Determine the number of shares outstanding.

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Definitions:

Marginal Costs

The additional cost incurred when producing one more unit of a product or service.

Advertising Elasticity of Demand

A measure of how responsive the quantity demanded of a good is to a change in the amount of advertising for that good.

Price Elasticity of Demand

An indicator of the sensitivity of demand for a product to variations in its price.

Advertising-Sales Ratio

The ratio of advertising expenditure to sales revenue, used as a measure of the effectiveness and intensity of advertising efforts.