On January 1, 2013, Proven Technology Corporation's common shares account had a balance of $250,000, representing 25,000 shares issued at $10 per share. On May 15, 2013, 12,000 shares were issued for $150,000 cash. On August 31, 2013, a 10% stock dividend was declared and distributed. What is the balance in Common Shares appearing on the statement of shareholders' equity on December 31, 2013?

Question

Quizplus · Accepted Answer

The calculations are as follows:

Initial balance: 25,000 shares x $10 = $250,000

Shares issued on May 15, 2013: 12,000 shares x $12.50 (issue price per share = $150,000 / 12,000 shares) = $150,000

Total shares after May 15 issuance: 37,000 shares

Stock dividend: 10% x 37,000 shares = 3,700 shares

Total shares after stock dividend: 40,700 shares

Common shares balance on December 31, 2013:

40,700 shares x $10 per share = $407,000

Therefore, the correct answer is C) $400,000.

On January 1, 2013, Proven Technology Corporation's Common Shares Account