Murphy Products Ltd.'s statement of financial position includes total assets of $1,326,000 and the following equity account balances at December 31, 2018:

Murphy's common shares are selling for $17 per share on December 31, 2018.

Question1:

Determine how much Murphy Products would have reported for total assets and retained earnings on December 31, 2018, if the firm had declared and paid a $5,000 cash dividend on December 31, 2018. Prepare the journal entry for this cash dividend.

Question 2:Determine how much Murphy would have reported for total assets and retained earnings on December 31, 2018, if the firm had issued a 5% stock dividend on December 31, 2018. Prepare the journal entry for this stock dividend.

Answer:Retained earnings reported = $197,500

Question 3:Conceptual ConnectionHow much would Murphy have reported for total assets and retained earnings on December 31, 2018, if the firm had effected a 3-for-1 stock split on December 31, 2018? Is a journal entry needed to record the stock split? Why or why not?