On December 31, 2020, Pekoe Corporation reported $3,000,000 in its Common Shares account (200,000 issued) and retained earnings of $1,000,000. During 2021, the following events occurred:
1. On July 1, the company issued 100,000 common shares at $17 per share.
2. On December 15, the board of directors declared a 15% stock dividend to common shareholders of record on December 31, payable on January 15, 2022.
3. The market value of Pekoe Corporation common shares was $16 per share on December 15 and $14 per share on December 31.
4. Profit for 2021 was $625,000.
Instructions
a) Record the issue of shares on July 1 and the declaration of the stock dividend on December 15.
b) Prepare the shareholders' equity section of the statement of financial position at December 31, 2021.

Question

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The Answer of On December 31, 2020, Pekoe Corporation reported $3,000,000 in its Common Shares account (200,000 issued) and retained earnings of $1,000,000. During 2021, the following events occurred:
1. On July 1, the company issued 100,000 common shares at $17 per share.
2. On December 15, the board of directors declared a 15% stock dividend to common shareholders of record on December 31, payable on January 15, 2022.
3. The market value of Pekoe Corporation common shares was $16 per share on December 15 and $14 per share on December 31.
4. Profit for 2021 was $625,000.
Instructions
a) Record the issue of shares on July 1 and the declaration of the stock dividend on December 15.
b) Prepare the shareholders' equity section of the statement of financial position at December 31, 2021.

On December 31, 2020, Pekoe Corporation Reported $3,000,000 in Its