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larisa [96]
3 years ago
9

Sheridan Company has had 4 years of record earnings. Due to this success, the market price of its 450,000 shares of $2 par value

common stock has increased from $12 per share to $51. During this period, paid-in capital remained the same at $2,700,000. Retained earnings increased from $2,025,000 to $13,500,000. CEO Don Ames is considering either (1) a 15% stock dividend or (2) a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on (a) retained earnings, (b) total stockholders’ equity, and (c) par value per share.(a)1. Stock dividend - retained earnings $2. 2-for-1 stock split - retained earnings $(b)
Sheridan Company Original Balance After DividendAfter SplitPaid-in capital $$$ Retained earnings Total stockholder’s equity $ $ $ Shares outstanding (c)1. Stock dividend - par value per share $2. 2-for-1 stock split - par value per share
Business
1 answer:
k0ka [10]3 years ago
6 0

Answer:

<u>15% stock dividend</u>

                                       before                  after

retained earnings      $13,500,000       $10,057,500

common stock               $900,000         $1,035,000

APIC                             $2,700,000        $6,007,500

stockholders' equity   $17,100,000        $17,100,000

par value                     $2 per stock        $2 per stock

<u>2 for 1 stock split</u>

                                       before                  after

retained earnings      $13,500,000       $13,500,000

common stock               $900,000           $900,000

APIC                             $2,700,000        $2,700,000

stockholders' equity   $17,100,000        $17,100,000

par value                     $2 per stock        $1 per stock

Explanation:

market price increased from $12 to $51 (450,000 stocks outstanding x $2 par value)

additional paid in capital $2,700,000

retained earnings increased from $2,025,000 to $13,500,000

15% stock dividend, small stock dividend, journal entry:

Retained earnings 3,442,500 (= 450,000 stocks x 15% x $51)

    Cr Common stock 135,000 (= 67,500 stocks x $2)

    Cr Additional paid in capital 3,307,500

2 for 1 stock split does not require a journal entry since no values are changed in the balance sheet, only the number of stocks change and teh par value decreases by 50%

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5 0
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An incomplete cost of goods manufactured schedule is presented below.
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Completing the Cost of Goods Manufactured Schedule for Riverbed Company is as follows:

<h3>Cost of Goods Manufactured Schedule</h3>

Work in process (1/1)                             $222,600

Direct materials:

Raw materials inventory (1/1)                 $ 47,300

Add: Raw materials purchases              168,000

Total raw materials available for use $215,300

Less: Raw materials inventory (12/31)     24,500

Direct materials used                          $190,800

Direct labor                                          $114,500

Manufacturing overhead:

Indirect labor                 19,600

Factory depreciation   37,900

Factory utilities             72,600

Total overhead                                       130,100

Total manufacturing cost                  $658,000

Total cost of work in process           $658,000

Less: Work in process (12/31)                85,600

Cost of goods manufactured            $572,400

<h3>What is the Schedule of Cost of Goods Manufactured?</h3>

The Schedule of Cost of Goods Manufactured shows the costs of:

  • Beginning Work in Process
  • Raw materials used
  • Direct labor
  • Overhead
  • Less Ending Work in Process.

Thus, the Schedule of Cost of Goods Manufactured for Riverbed Company shows that the cost of goods manufactured for the period is <u>$572,400</u>.

Learn more about preparing the Schedule of Cost of Goods Manufactured at brainly.com/question/24257342

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