Question

Problem 14-03A a-d On January 1, 2020, Sunland Corporation had the following stockholders' equity accounts. Common Stock (no par value, 93,000 shares issued and outstanding) Retained Earnings $1,450,000 476,000 During the year, the following transactions occurred. Feb. 1 Mar. 1 Apr. 1 July 1 31 Dec. 1 31 Declared a $1 cash dividend per share to stockholders of record on February 15, payable March 1. Paid the dividend declared in February. Announced a 3-for-1 stock split. Prior to the split, the market price per share was $38. Declared a 5% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $10 per share. Issued the shares for the stock dividend. Declared a $0.50 per share dividend to stockholders of record on December 15, payable January 5, 2021. Determined that net income for the year was $331,000. Prepare the stockholders' equity section of the balance sheet at March 31. (Enter account name only and do not provide descriptive information. Round answers to o decimal places, e.g. 5,250.) SUNLAND CORPORATION Partial Balance Sheet March 31, 2020 Stockholders' Equity Paid-in Capital Capital Stock Common Stock 1450000 Retained Earnings 476000 Total Stockholders' Equity Prepare the stockholders' equity section of the balance sheet at June 30. (Enter account name only and do not provide descriptive information. Round answers to 0 decimal places, e.g. 5,250.)

Answer 1

31-Mar 30-Jun 30-Sep 31-Dec Sunland Corporation Balance Sheet -Partial Stockholders Equity Paid in Capital Capital Stock Common Stock Retained Earnings Total Stockholders Equity 1,450,000 383,000 1,833,000 1,450,000 383,000 1,833,000 1,589,500 243,500 1,833,000 1,589,500 428,025 2,017,525

Credit Sunland Corporation Date Account 1-Feb Retained Earnings Dividends Payable Debit 93,000 Calculation =93,000*1 93,000 93,000 1-Mar Dividends Payable Cash 93,000 1-Apr No Entry In 3 for 1 split, total number of shares triples to 279,000 shares (93,000*3) 139,500 1-Jul Retained Earnings Common Stock Dividend Distributable 139,500 =13,950*10 =13,950*10 139,500 31-Jul Common Stock Dividend Distributable Common Stock 139,500 146,475 Below wkgs 1-Dec Retained Earnings Dividends Payable 146,475 331,000 31-Dec Income Summary Retained Earnings 331,000 =93,000*2 Workings Cash Dividends Opening Shares Stock Split - 3 for 1 Subtotal 5% Stock Dividend Number of Common Shares Issued Cash Dividend per share Cash Dividend Declared 93,000 186,000 279,000 13,950 292,950 0.50 146,475 =279,000*5% =292,960*0.50

Credit Balance Balance Date Explanation Ref Debit Credit Common Stock Dividend Distributable 1-Jul Dividend Declared $ 139,500 31-Jul Dividend Issued $ 139,500 $ 139,500 $1,450,000 $1,589,500 $ 139,500 Sunland Corporation T Accounts Date Explanation Ref Debit Common Stock 1-Jan Balance 31-Jul Stock dividends Retained Earnings 1-Jan Balance 1-Feb Cash dividends $ 93,000 31-Mar Closing Balance 30-Jun Closing Balance 1-Jul Stock dividends $ 139,500 30-Sep Closing Balance 1-Dec Cash dividends $ 146,475 31-Dec Net income $ 476,000 $ 383,000 $ 383,000 $ 383,000 $ 243,500 $ 243,500 $ 97,025 $ 428,025 $ 331,000