Declared the annual 2017 $11 per share dividend on preferred stock and the $2 pe

Question

Declared the annual 2017 $11 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2018.

Prepare journal entries to record the transactions described above.

Sheridan Company reported the following amounts in the stockholders’ equity section of its December 31, 2016, balance sheet. Preferred stock, 11%, $100 par (10,000 shares authorized, 2,100 shares issued) $210,000 Common stock, $5 par (91,000 shares authorized, 18,200 shares issued) 91,000 Additional paid-in capital 130,000 Retained earnings 448,000    Total $879,000
During 2017, Sheridan took part in the following transactions concerning stockholders’ equity. Paid the annual 2016 $11 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016. 2. Purchased 1,800 shares of its own outstanding common stock for $43 per share. Sheridan uses the cost method. 3. Reissued 800 treasury shares for land valued at $35,100. 4. Issued 540 shares of preferred stock at $107 per share. 5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $46 per share. 6. Issued the stock dividend. 7.

Declared the annual 2017 $11 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2018.

Prepare journal entries to record the transactions described above.

Explanation / Answer

Solution:

Journal Entries - Sheridan S. No. Particulars Debit Credit 1 Dividend payable Dr (2100*$11 + 18200*$2) $59,500.00       To Cash $59,500.00 (Being EFT deposit by customer) 2 Treasury Stock Dr (1800*$43) $77,400.00       To Cash $77,400.00 (Being own share repurchased) 3 Land Dr $35,100.00       To Treasury Stock (800*$43) $34,400.00       To Additional paid in capital $700.00 (Being treasury share reissued on purchase of land) 4 Cash Dr (540*$107) $57,780.00       To Preferred Stock $54,000.00       To Additional paid in capital $3,780.00 (Being preferred share issued) 5 Retained Earnings Dr (17200 * 10% * $46) $79,120.00       To Common stock dividend distributable $79,120.00 (Being stock dividend declared) 6 Common stock dividend distributable Dr $79,120.00       To Common Stock $8,600.00       To Additional paid in capital $70,520.00 (Being stock dividend issued 7 Retained Earnings Dr (2640*$11 + 18920*$2) $66,880.00       To Dividend Payable $66,880.00 (Being dividend declared on preferred stock and common stock)

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.