Question

On January 1, 2020, Sheridan Corporation had the following stockholders' equity accounts. 

Common Stock ($22 par value, 53,500 shares issued and outstanding)  $1,177,000

Paid-in Capital in Excess of Par-Common Stock 191,000

Retained Earnings 631,000 

During the year, the following transactions occurred. 

Feb. 1 Declared a $3 cash dividend per share to stockholders of record on February 15, payable March 1. 

Mar. 1 Paid the dividend declared in February. 

Apr. 1 Announced a 2-for-1 stock split. Prior to the split, the market price per share was $38. 

July 1 Declared a 10% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $15 per share. 

31 Issued the shares for the stock dividend. 

Answer 1

Date	Account titles & Explanations					Debit	Credit
1-Feb	Cash dividend					160,500
	dividends payable		(53500*3)				160,500
1-Mar	Dividends payable					160500
	Cash						160500
1-Apr	no entry	(107,000 shares at $11 par value)
1-Jul	Stock dividend		(10700*15)			160500
	Stock dividend distributable			(10700*11)			117,700
	paid in capital in excess of par -CS						42800
	(107,000*10%=10700 shares)
31-Jul	Stock dividend distributable					117700
	common stock						117700
1-Dec	Cash dividend					35310
	dividends payable						35310
	(107000+10700)*.3
31-Dec	income summary					367,500
	retained earnings						367,500
31-Dec	retained earnings					160,500
	Stock dividend						160,500
31-Dec	Retained earnings					195,810
	cash dividend						262,400
b)
	Common stock
	Date	Explanation	Ref	Debit	Credit	Balance
	1-Jan	Bal				1,177,000
	31-Jul				117700	1,294,700
	Common stock dividend distributable
	Date	Explanation	Ref	Debit	Credit	Balance
	1-Jul				117,700	117,700
	31-Jul			117700		0
	Paid in capital in excess of par value
	Date	Explanation	Ref	Debit	Credit	Balance
	1-Jan	Bal				191,000
	1-Jul				42800	233,800
	Retained earnings
	Date	Explanation	Ref	Debit	Credit	Balance
	1-Jan	Bal				631,000
	31-Dec				367,500	998,500
	31-Dec			160,500		838,000
	31-Dec			195,810		642,190

Cash Dividend
Date	Explanation	Ref	Debit	Credit	Balance
1-Jan	Bal				0
1-Feb			160,500		160,500
1-Dec			35310		195,810
Stock Dividend
Date	Explanation	Ref	Debit	Credit	Balance
1-Jan	Bal				0
1-Jul			160,500		160,500

c)		Balance sheet (Partial)
	Stockholder's Equity
	Paid in capital
	Capital stock
	Common stock ,$11 par value ,117700 shares issued
	and outstanding					1,294,700
	Addittional paid in capital
	in excess of par value					233,800
	Total paid in capital					1,528,500
	Retained earnings					642,190
	Total stockholder's Equity					2,170,690