Fun City Inc. ended 2016 with 8 million common shares
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Fun City Inc. ended 2016 with 8 million common shares issued and outstanding. The average issue price was $1.50. Begin
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Fun City Inc. ended 2016 with 8 million common shares issued and outstanding. The average issue price was $1.50. Beginning retained earnings totaled $40 million. â€¢ In March 2017, Fun City issued 2 million common shares at a price of $2 per share. â€¢ In May, the company declared and distributed a 10% stock dividend at a time when Fun City's common shares had a fair value of $3 per share. â€¢ Then in October, Fun City's stock price dropped to $1 per share and the company executed a 1-for-2 stock split. â€¢ For the year, Fun City earned net income of $26 million and declared cash dividends of $17 million. Determine what Fun City should report for shareholders' equity at December 31, 2017. Journal entries are not required.
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