Murphy Products Ltd.s statement of financial position includes total assets of $3,873,000 and the following equity account balances at December 31, 2022:

Murphy Products Ltd.s

Statement of Financial Position (Partial)

December 31, 2022

1	Common shares, no par, 10,000 shares issued and outstanding	$97,000.00
2	Retained earnings	418,000.00
3	Total shareholders equity	$515,000.00

Murphys common shares is selling for $22 per share on December 31, 2022.

Required:

1.	Determine how much Murphy Products would have reported for total assets and retained earnings on December 31, 2022, if the firm had declared and paid a $26,000 cash dividend on December 31, 2022. Prepare the journal entry for this cash dividend.
2.	Determine how much Murphy would have reported for total assets and retained earnings on December 31, 2022, if the firm had issued a 14% stock dividend on December 31, 2022. Prepare the journal entry for this stock dividend.
3.	Conceptual Connection: How much would Murphy have reported for total assets and retained earnings on December 31, 2022, if the firm had effected a 3-for-1 stock split on December 31, 2022? Is a journal entry needed to record the stock split?

CHART OF ACCOUNTS

Murphy Products Ltd.s

General Ledger

	ASSETS
111	Cash
112	Petty Cash
121	Accounts Receivable
123	Allowance for Doubtful Accounts
124	Notes Receivable
125	Supplies
126	Prepaid Insurance
127	Prepaid Rent
128	Inventory
129	Interest Receivable
130	Investment
131	Land
132	Buildings
133	Equipment
134	Furniture
135	Trucks
139	Accumulated Depreciation
141	Leased Assets

	LIABILITIES
211	Accounts Payable
212	Utilities Payable
213	Insurance Payable
214	Wages Payable
215	Rent Payable
221	Interest Payable
223	Income Taxes Payable
231	Dividends Payable
232	Unearned Sales Revenue
233	Unearned Rent Revenue
241	Bonds Payable
251	Notes Payable

	EQUITY
311	Common Shares
312	Additional Paid-In Capital-Common Shares
313	Preferred Stock
314	Additional Paid-In Capital-Preferred Shares
315	Treasury Stock
316	Additional Paid-In Capital-Treasury Shares
321	Retained Earnings
331	Dividends

	REVENUE
411	Sales Revenue
412	Service Revenue
413	Interest Income
414	Rent Revenue

	EXPENSES
511	Cost of Goods Sold
512	Advertising Expense
513	Supplies Expense
514	Utilities Expense
515	Insurance Expense
516	Service Charge Expense
517	Bad Debt Expense
518	Rent Expense
521	Wages Expense
531	Interest Expense
541	Depreciation Expense
551	Income Taxes Expense
552	Legal Expense

1a. Determine how much Murphy Products would have reported for total assets and retained earnings on December 31, 2022, if the firm had declared and paid a $26,000 cash dividend on December 31, 2022.

Total assets
Retained earnings

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1b. Prepare the journal entry for this cash dividend on December 31.

PAGE 1

GENERAL JOURNAL

IMPACT ON FINANCIAL STATEMENTS

INCOME STATEMENT

BALANCE SHEET

	DATE	ACCOUNT	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY	REVENUE	EXPENSES	NET INCOME
1
2

2b. Prepare the journal entry for this stock dividend on December 31.

PAGE 1

GENERAL JOURNAL

IMPACT ON FINANCIAL STATEMENTS

INCOME STATEMENT

BALANCE SHEET

	DATE	ACCOUNT	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY	REVENUE	EXPENSES	NET INCOME
1
2

2a. Determine how much Murphy would have reported for total assets and retained earnings on December 31, 2022, if the firm had issued a 14% stock dividend on December 31, 2022.

Total assets
Retained earnings

3. Conceptual Connection: How much would Murphy have reported for total assets and retained earnings on December 31, 2022, if the firm had effected a 3-for-1 stock split on December 31, 2022?

Total assets
Retained earnings

Is a journal entry needed to record the stock split?

No

Yes