Exercise 15-14 The stockholders’ equity accounts of Sunland Company have the fol

Question

Exercise 15-14

The stockholders’ equity accounts of Sunland Company have the following balances on December 31, 2017.

Shares of Sunland Company stock are currently selling on the Midwest Stock Exchange at $35.

Prepare the appropriate journal entries for each of the following cases. (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.)

Common stock, $10 par, 289,000 shares issued and outstanding $2,890,000 Paid-in capital in excess of par—common stock 1,300,000 Retained earnings 5,860,000

Explanation / Answer

Appropriate journal entries for each of the following cases are as prepared below:

Date Particulars L.F Amount ($) Amount ($) (a) Retained Earnings (289,000*8%*35) 8,09,200 Common Stock Dividend distributable (289,000*8%*10) 2,31,200 Additional paid in capital 5,78,000 (for 10% stock declared) Common Stock Dividend Distributable 2,31,200 Common Stock 2,31,200 (For stock issued) (b) Retained Earnings (289,000*100%*35) 1,01,15,000 Common Stock Dividend distributable (289,000*100%*10) 28,90,000 Additional paid in capital 72,25,000 (for 10% stock declared) Common Stock Dividend Distributable 28,90,000 Common Stock 28,90,000 (For stock issued) (c ) No entry as stock split will increase the number of shares by 289,000 and par value of stock will reduce by 5

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