During its first year of operations, Sheridan Corporation had these transactions pertaining to its common stock. Jan. 10 Issued 26,700 shares for cash at $4 per share. July 1 Issued 58,500 shares for cash at $7 per share. (a) Prepare a tabular summary to record the transactions, assuming that the common stock has a par value of $4 per share. Include margin explanations for the changes in revenues and expenses. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Assets = Liabilities + Paid-in-Capital Cash = + Common Stock + PIC in Excess o Com Jan. 10 $ $ $ $ July 1 $ $ $ $
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10: Cash received: $$26,700 \times $4 = $106,800$$ Common Stock: $$26,700 \times $4 = $106,800$$ PIC in Excess of Par: $$0$$ July 1: Cash received: $$58,500 \times $7 = $409,500$$ Common Stock: $$58,500 \times $4 = $234,000$$ Show more…
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Sheridan Corporation issued 104,000 shares of $20 par value, cumulative, 7% preferred stock on January 1, 2021, for $2,630,000. In December 2023, Sheridan declared its first dividend of $810,000. Prepare Sheridan's journal entry to record the issuance of the preferred stock. (Credit account titles are automatically indented when the 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.) Account Titles and Explanation Debit Credit Preferred Stock $2,080,000 Common Stock $0 Paid-in Capital in Excess of Par - Preferred Stock $550,000 Cash $2,630,000 If the preferred stock is not cumulative, how much of the $810,000 would be paid to common stockholders? Common Stock Dividends $810,000 If the preferred stock is cumulative, how much of the $810,000 would be paid to common stockholders? Common Stock Dividends $0
Akash M.
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Early in the year, Bill Sharnes and several friends organized a corporation called Sharnes Communications, Inc. The corporation was authorized to issue 50,000 shares of $100 par value, 10 percent cumulative preferred stock and 400,000 shares of $2 par value common stock. The following transactions (among others) occurred during the year. Jan. 6: Issued for cash 20,000 shares of common stock at $14 per share. The shares were issued to Sharnes and 10 other investors. Jan. 7: Issued an additional 500 shares of common stock to Sharnes in exchange for his services in organizing the corporation. The stockholders agreed that these services were worth $7,000. Jan. 12: Issued 2,500 shares of preferred stock for cash of $250,000. June 4: Acquired land as a building site in exchange for 15,000 shares of common stock. In view of the appraised value of the land and the progress of the company, the directors agreed that the common stock was to be valued for purposes of this transaction at $15 per share. Nov. 15: The first annual dividend of $10 per share was declared on the preferred stock to be paid December 20. Dec. 20: Paid the cash dividend declared on November 15. Dec. 31: After the revenue and expenses were closed into the Income Summary account, that account indicated a net income of $147,200. Instructions: a. Prepare journal entries in general journal form to record these transactions. Include entries at December 31 to close the Income Summary account and the Dividends account. b. Prepare the stockholders' equity section of the Sharnes Communications, Inc., balance sheet at December 31.
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