Question

Sheridan Corporation has outstanding 363,000 shares of $10 par value common stock. The corporation declares a 5% stock dividend when the fair value of the stock is $71 per share. Prepare the journal entries for Sheridan Corporation for both the date of declaration and the date of distribution. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Debit Credit Account Titles and Explanation Declaration Date Distribution Date

Answer 1

Declaration date

Retained earnings (363,000*5%*71)	1,288,650
Common stock dividend distributable (363,000*10*5%)		181,500
Paid in capital in excess of par - Common stock		1,107,150

Distribution date

Common stock dividend distributable	181,500
Common stock		181,500