On January 1, 2017, Shellenburger Inc. had the following stockholders’ equity ac

Question

On January 1, 2017, Shellenburger Inc. had the following stockholders’ equity account balances. Common Stock, no-par value (527,500 shares issued) $1,582,500 ,Common Stock Dividends Distributable 194,000 ,Retained Earnings 551,500 During 2017, the following transactions and events occurred.

1. Issued 79,125 shares of common stock as a result of a 15% stock dividend declared on December 15, 2016.

2. Issued 25,950 shares of common stock for cash at $7 per share.

3. Corrected an error that had understated the net income for 2015 by $73,750.

4. Declared and paid a cash dividend of $82,900.

5. Earned net income of $333,000.

Prepare the stockholders’ equity section of the balance sheet at December 31, 2017

Explanation / Answer

Details Common Stock Stock dividend distributable Retained Earning Jan 1. 2017. opening balance          1,582,500              194,000          551,500 Issue of 79125 stocks as stock dividend              194,000           (194,000) Issue of 25950 shares @$7              181,650 Adjustment of net income of 2015.             73,750 Cash dividend declared & Paid          (82,900) Net Income          333,000 Total          1,958,150                         -            875,350 Shellengburger Inc. Stockholders' Equity Position Dec 31.2017. Details   Amt $ Common Stock no par (632,575 shares issued)          1,958,150 Retained Earning                875,350 Total Stockholders' Equity          2,833,500

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