Answered

Discover the answers you need at Westonci.ca, a dynamic Q&A platform where knowledge is shared freely by a community of experts. Experience the convenience of getting reliable answers to your questions from a vast network of knowledgeable experts. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

On January 1, Sheridan Company had 97,500 shares of no-par common stock issued and outstanding. The stock has a stated value of $6 per share. During the year, the following occurred.

Apr. 1 Issued 23,000 additional shares of common stock for $17 per share.
June 15 Declared a cash dividend of $1 per share to stockholders of record on June 30.
July 10 Paid the $1 cash dividend.
Dec. 1 Issued 1,500 additional shares of common stock for $19 per share.
15 Declared a cash dividend on outstanding shares of $2.90 per share to stockholders of record on December 31.

Required:
Prepare the entries to record these transactions.

Sagot :

anthougo

Answer:

Sheridan Company

Journal Entries:

Apr. 1: Debit Cash $391,000

Credit Common stock $138,000

Credit Additional Paid-in Capital $253,000

To record the issue of 23,000 additional shares for $17 per share.

June 15: Debit Retained Earnings $120,500

Credit Dividends Payable $120,500

To record the declaration of cash dividend of $1 per share (120,500 shares).

July 10: Debit Dividends Payable $120,500

Credit Cash $120,500

To record the payment of dividends.

Dec. 1: Debit Cash $28,500

Credit Common stock $9,000

Credit Additional Paid-in Capital $19,500

To record the issue of 1,500 shares for $19 per share.

Dec. 12: Debit Retained Earnings $353,800

Credit Dividends Payable $353,800

To record the declaration of $2.90 per share dividends to 122,000 shares

Explanation:

a) Data and Analysis:

Outstanding common stock = 97,500 shares

Stated value per share = $6

Apr. 1 Cash $391,000 Common stock $138,000 Additional Paid-in Capital $253,000, 23,000 additional shares for $17 per share.

June 15: Retained Earnings $120,500 Dividends Payable $120,500 (97,500 + 23,000)

July 10: Dividends Payable $120,500 Cash $120,500

Dec. 1: Cash $28,500 Common stock $9,000 Additional Paid-in Capital $19,500

Dec. 12: Retained Earnings $353,800 Dividends Payable $353,800 (122,000 at $2.90 per share, i.e. 120,500 + 1,500 shares)

Visit us again for up-to-date and reliable answers. We're always ready to assist you with your informational needs. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.