In: Accounting
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.
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 |