On January 1, 2020, Sheridan Corporation had the following stockholders' equity accounts.
Common Stock ($22 par value, 53,500 shares issued and outstanding) $1,177,000
Paid-in Capital in Excess of Par-Common Stock 191,000
Retained Earnings 631,000
During the year, the following transactions occurred.
Feb. 1 Declared a $3 cash dividend per share to stockholders of record on February 15, payable March 1.
Mar. 1 Paid the dividend declared in February.
Apr. 1 Announced a 2-for-1 stock split. Prior to the split, the market price per share was $38.
July 1 Declared a 10% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $15 per share.
31 Issued the shares for the stock dividend.
Date | Account titles & Explanations | Debit | Credit | ||||
1-Feb | Cash dividend | 160,500 | |||||
dividends payable | (53500*3) | 160,500 | |||||
1-Mar | Dividends payable | 160500 | |||||
Cash | 160500 | ||||||
1-Apr | no entry | (107,000 shares at $11 par value) | |||||
1-Jul | Stock dividend | (10700*15) | 160500 | ||||
Stock dividend distributable | (10700*11) | 117,700 | |||||
paid in capital in excess of par -CS | 42800 | ||||||
(107,000*10%=10700 shares) | |||||||
31-Jul | Stock dividend distributable | 117700 | |||||
common stock | 117700 | ||||||
1-Dec | Cash dividend | 35310 | |||||
dividends payable | 35310 | ||||||
(107000+10700)*.3 | |||||||
31-Dec | income summary | 367,500 | |||||
retained earnings | 367,500 | ||||||
31-Dec | retained earnings | 160,500 | |||||
Stock dividend | 160,500 | ||||||
31-Dec | Retained earnings | 195,810 | |||||
cash dividend | 262,400 | ||||||
b) | |||||||
Common stock | |||||||
Date | Explanation | Ref | Debit | Credit | Balance | ||
1-Jan | Bal | 1,177,000 | |||||
31-Jul | 117700 | 1,294,700 | |||||
Common stock dividend distributable | |||||||
Date | Explanation | Ref | Debit | Credit | Balance | ||
1-Jul | 117,700 | 117,700 | |||||
31-Jul | 117700 | 0 | |||||
Paid in capital in excess of par value | |||||||
Date | Explanation | Ref | Debit | Credit | Balance | ||
1-Jan | Bal | 191,000 | |||||
1-Jul | 42800 | 233,800 | |||||
Retained earnings | |||||||
Date | Explanation | Ref | Debit | Credit | Balance | ||
1-Jan | Bal | 631,000 | |||||
31-Dec | 367,500 | 998,500 | |||||
31-Dec | 160,500 | 838,000 | |||||
31-Dec | 195,810 | 642,190 |
Cash Dividend | |||||
Date | Explanation | Ref | Debit | Credit | Balance |
1-Jan | Bal | 0 | |||
1-Feb | 160,500 | 160,500 | |||
1-Dec | 35310 | 195,810 | |||
Stock Dividend | |||||
Date | Explanation | Ref | Debit | Credit | Balance |
1-Jan | Bal | 0 | |||
1-Jul | 160,500 | 160,500 |
c) | Balance sheet (Partial) | |||||
Stockholder's Equity | ||||||
Paid in capital | ||||||
Capital stock | ||||||
Common stock ,$11 par value ,117700 shares issued | ||||||
and outstanding | 1,294,700 | |||||
Addittional paid in capital | ||||||
in excess of par value | 233,800 | |||||
Total paid in capital | 1,528,500 | |||||
Retained earnings | 642,190 | |||||
Total stockholder's Equity | 2,170,690 | |||||
On January 1, 2020, Sheridan Corporation had the following stockholders' equity accounts.
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