Question

Question 3 View Policies Current Attempt in Progress Before preparing financial statements for the current year, the chief accountant for Pharoah Company discovered the following errors in the accounts 1. The declaration and payment of $53,000 cash dividend was recorded as a debit to Interest Expense $53,000 and a credit to Cash $53,000 2. A 10% stock dividend (1,300 shares) was declared on the $14 par value stock when the market price per share was $17. The only entry made was Stock Dividends (Dr.) $18,200 and Dividend Payable (Cr) $18.200. The shares have not been issued. 3. A 4-for-1 stock split involving the issue of 366,000 shares of $5 par value common stock for 91,500 shares of $20 par value common stock was recorded as a debit to Retained Earnings $1,830,000 and a credit to Common Stock $1,830,000 Prepare the correcting entries at December 31. (Credit account titles are automatically Indented when amount is entered. Do not Indent manually no entry is required, select "No Entry for the accountities and enter for the amounts.) No. Date Account Titles and Explanation Debit Credit 1. Dec. 31

Answer 1

			Debit	Credit
1	Dec. 31	Cash dividends	53000
		Interest expense		53000
2	Dec. 31	Dividends payable	18200
		Stock dividends	3900
		Common stock dividends distributable		18200	=1300*14
		Paid-in cap. in excess of par value		3900	=1300*(17-14)
3	Dec. 31	Common stock	1830000
		Retained earnings		1830000