On January 1, 2012, Aquarius Corporation Had 25,000 Common Shares

question 98

Essay

On January 1, 2012, Aquarius Corporation had 25,000 common shares issued at $1 per share. Given the following transactions that occurred during the year, prepare the appropriate journal entries.
Apr. 1 Issued 10,000 common shares for $100,000.
June 1 Declared a cash dividend of $2 per share to shareholders.
June 30 Paid the $2 cash dividend.
Dec. 15 Declared a 10% stock dividend to shareholders of record on December 31.
At December 15, the shares were trading at $10.

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Definitions:

Income Before Taxes

Income before taxes is a measure of a company's profitability before any tax expense has been deducted from revenues.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time.

Return on Sales

A financial ratio that calculates how efficiently a company is at generating operating profit from its revenue.

Return on Assets

Return on Assets (ROA) is a financial ratio that measures the profitability of a company relative to its total assets, indicating how efficient a company is at using its assets to generate profits.