Question

In: Accounting

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.

Solutions

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

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