Problem 11-8A (Part Level Submission) On January 1, 2017, Sheffield Corp. had these stockholders’ equity accounts....

Problem 11-8A (Part Level Submission)

On January 1, 2017, Sheffield Corp. had these stockholders’ equity accounts.

Common Stock ($10 par value, 84,000 shares issued and outstanding)		$840,000
Paid-in Capital in Excess of Par Value		505,500
Retained Earnings		610,000

During the year, the following transactions occurred.

Jan.	15	Declared a $0.60 cash dividend per share to stockholders of record on January 31, payable February 15.
Feb.	15	Paid the dividend declared in January.
Apr.	15	Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $15 per share.
May	15	Issued the shares for the stock dividend.
Dec.	1	Declared a $0.50 per share cash dividend to stockholders of record on December 15, payable January 10, 2018.
Dec.	31	Determined that net income for the year was $376,000.

a.Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.) (Record entries in the order displayed in the problem statement. 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 0 for the amounts.)

b.)Enter the beginning balances and post the entries to the stockholders’ equity T-accounts. (Post entries in the order of journal entries posted

c.)Prepare the stockholders’ equity section of the balance sheet at December 31.

Expert Solution

a.
Date	Account Tittles and Explaination	Debit	Credit
Jan-15	Cash dividend ($0.60 X 84,000)	$ 50,400
	Dividend payable		$ 50,400

Feb-15	Dividend payable	$ 50,400
	Cash		$ 50,400

Apr-15	Stock dividends (84,000 X 10%) X $15	$ 1,26,000
	Common stock dividend distributable (84,000 X 10%) X $10		$ 84,000
	Paid-in capital in excess of par value		$ 42,000

May-15	Common stock dividend distributable	$ 84,000
	Common stock		$ 84,000

Dec-01	Cash dividend [$0.50 X (84,000 + 8,400)]	$ 46,200
	Dividend payable		$ 46,200


Dec-31	Income Summary	$ 3,76,000
	Retained Earnings		$ 3,76,000

Dec-31	Retained Earnings	$ 96,600
	Cash dividend		$ 96,600

Dec-31	Retained Earnings	$ 1,26,000
	Stock dividend		$ 1,26,000

b.	Common stock
	Beginning Balance	$ 8,40,000
	Stock dividend distributable	$ 84,000
	Ending balance	$ 9,24,000

	Paid-in capital in excess of par value
	Beginning Balance	$ 5,05,500
	Stock dividend	$ 42,000
	Ending balance	$ 5,47,500

	Retained Earnings
	Cash dividend	$ 96,600	Beginning Balance	$ 6,10,000
	Stock dividend	$ 1,26,000	Net Income	$ 3,76,000

			Ending balance	$ 7,63,400

c.	Stockholder's Equity at December 31
	Common Stock	$ 9,24,000
	Paid-in capital in excess of par value	$ 5,47,500
	Total paid - in - capital	$ 14,71,500
	Retained Earnings	$ 7,63,400
	Total Stockholder's Equity	$ 22,34,900

ekkarill92 answered 2 years ago

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