ONLY PART C
Problem 14-02A a-c (Part Level Submission) The post-closing trial balance of Sheridan Corporation at December 31, 2020, contains the following stockholders' equity accounts. Preferred Stock (16,000 shares issued) Common Stock (259,000 shares issued) Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Par-Common Stock Common Stock Dividends Distributable Retained Earnings $800,000 2,590,000 259,000 410,000 259,000 921,900 A review of the accounting records reveals the following. 2. No errors have been made in recording 2020 transactions or in preparing the closing entry for net income. Preferred stock is $50 par, 6%, and cumulative; 16,000 shares have been outstanding since January 1, 2019. Authorized stock is 21,000 shares of preferred, 518,000 shares of common with a $10 par value. The January 1 balance in Retained Earnings was $1,120,000. On July 1, 21,600 shares of common stock were issued for cash at $18 per share. On September 1, the company discovered an understatement error of $87,000 in computing salaries and wages expense in 2019. The net of tax effect of $60,900 was properly debited directly to Retained Earnings. A cash dividend of $259,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2019. On December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $18. Net income for the year was $588,000. On December 31, 2020, the directors authorized disclosure of a $193,000 restriction of retained earnings for plant expansion. (Use Note X.) 8. 9. 10. Reproduce the Retained Earnings account for 2020. (List items in order presented in the problem.) Retained Earnings Sept. 1 Prior Per. Adj. 200 Jan. 1 Balance 1120000 Dec. 31 Cash Dividends 259000 T Dec. 31 Net Income AT 588000 Dec. 31 Stock Dividends Dec. 31 Stock Dividends at 466200 4662002 Dec. 31 Balance 921900 Chali KU IHO Vor for non chou Alork (b) Your answer is correct. Prepare a stockholders' equity section at December 31, 2020. (Enter account name only and do not provide descriptive information SHERIDAN CORPORATION. Partial Balance Sheet December 31, 2020 T Stockholders' Equity T Paid-in Capital T Capital Stock Preferred Stock 800,000 Common Stock 2,590,000 Common Stock Dividends Distributable 259,000 2,849,000 T Total Capital Stock 3,649,000 Additional Paid-in Capital Paid-in Capital in Excess of Par-Preferred Stock 259,000 Common Stock 2,590,000 Common Stock Dividends Distributable 259,000 2,849,000 T Total Capital Stock 3,649,000 Additional Paid-in Capital | Paid-in Capital in Excess of Par-Preferred Stock 259,000 Paid-in Capital in Excess of Par-Common Stock | 410,000 Total Additional Paid-in Capital 669,000 T Total Paid-in Capital 4,318,000 Retained Earnings 921,900 T Total Stockholders' Equity 5,239,900 Click if you would like to Show Work for this question: Open Show Work (c) Compute the allocation of the cash dividend to preferred and common stock. Allocation of the cash dividend to preferred stock Allocation of the cash dividend to common stock
