Question
In: Accounting
PLEASE ANSWER RIGHT NOW!! On December 31, 2020, Sunland Corporation had the following shareholders’ equity accounts:...
PLEASE ANSWER RIGHT NOW!!
On December 31, 2020, Sunland Corporation had the following shareholders’ equity accounts:
| SUNLAND CORPORATION Balance Sheet (partial) December 31, 2020 |
||
| Shareholders’ equity | ||
| Common shares (unlimited number of shares authorized, 94,000 issued) | $1,172,000 | |
| Retained earnings | 590,000 | |
| Total shareholders’ equity | $1,762,000 | |
During the year, the following transactions occurred:
| Jan. | 15 | Declared a $1 per share cash dividend to shareholders of record on January 31, payable February 15. | ||
| July | 1 | Announced a 2-for-1 stock split. The market price per share on the date of the announcement was $12. | ||
| Dec. | 15 | Declared a 10% stock dividend to shareholders of record on December 30, distributable on January 15. On December 15, the market price of each share was $6; on December 30, $7; and on January 15, $6. | ||
| 31 | Determined that profit before income tax for the year was $410,000. The company has a 35% income tax rate. |
Journalize the transactions and closing entries for 2021.
(Credit account titles are automatically indented when
the amount is entered. Do not indent manually. If no entry is
required, select "No Entry" for the account titles and enter 0 for
the amounts. Record journal entries in the order presented in the
problem.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
Jan. 15Jan. 31Feb. 15July 1Dec. 15Dec. 30Dec. 31 |
|||
| (To record declaration of cash dividend.) | |||
|
Jan. 15Jan. 31Feb. 15July 1Dec. 15Dec. 30Dec. 31 |
|||
|
Jan. 15Jan. 31Feb. 15July 1Dec. 15Dec. 30Dec. 31 |
|||
| (To record payment of dividend.) | |||
|
July 1 |
Memo: 2-for-1 stock split increases the number of shares to |
||
|
Jan. 15Jan. 31Feb. 15July 1Dec. 15Dec. 30Dec. 31 |
|||
| (To record declaration of stock dividend.) |
|||
|
Jan. 15Jan. 31Feb. 15July 1Dec. 15Dec. 30Dec. 31 |
|||
|
Jan. 15Jan. 31Feb. 15July 1Dec. 15Dec. 30Dec. 31 |
|||
| (To close Income Summary.) | |||
|
Jan. 15Jan. 31Feb. 15July 1Dec. 15Dec. 30Dec. 31 |
|||
| (To close dividends to retained earnings.) |
Solutions
Expert Solution
Answer:
| Date | Account Titles | Debit | Credit | |
| Jan-15 | Cash Dividend | $ 94,000 | =94000*1 | |
| Cash Dividend Payable | $ 94,000 | |||
| (To record declaration of cash dividend) | ||||
| Feb-12 | Cash Dividend Payable | $ 94,000 | ||
| Cash | $ 94,000 | |||
| (To record Payment of Dividend) | ||||
| Jul-01 | Memo : 2-for-1 stock split increases the number of shares to 188000 | |||
| Dec-15 | Stock Dividend | $ 112,800 | =188000*10%*6 | |
| Stock Dividend Distributable | $ 112,800 | |||
| Dec-30 | No entry | |||
| Dec-31 | Income Summary | $ 266,500 | =410000*65% | |
| Retained Earnings | $ 266,500 | |||
| Dec-31 | Retained Earnings | $ 206,800 | ||
| Cash Dividend | $ 94,000 | |||
| Stock Dividend | $ 112,800 |
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