The following shareholders' equity accounts are reported by Sheridan Inc. on January 1:Common shares (unlimited authorized, 144,000 issued) $2,304,000Preferred shares ($4 cumulative, convertible, 100,000 authorized, 4,600 issued) 345,000Contributed surplus—reacquisition of common shares 29,200Retained earnings 1,256,000The following selected transactions occurred during the year:Feb. 11 Issued 48,000 common shares at $20 per share.Mar. 2 Reacquired 19,100 common shares at $22 per share.June 14 Split the common shares 2 for 1 when the common shares were trading at $30 per share.July 25 Reacquired 340 preferred shares at $70 per share.Sept. 16 Reacquired 48,000 common shares for $17 per share.Oct. 27 Declared a 5% common stock dividend distributable on December 13 to shareholders of record on November 24. The fair value of the common shares on October 27 was $19 per share.Dec. 13 Distributed the stock dividend declared on October 27. The fair value of the common shares on December 13 was $21 per share.1. Prepare journal entries for the transactions.2. Show how each class of shares will be presented in the shareholders’ equity section of the balance sheet at December 31.Pls show all calculations

Answered: mon shares 2 for 1 when the common…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following shareholders' equity accounts are reported by Sheridan Inc. on January 1:

Common shares (unlimited authorized, 144,000 issued)		$2,304,000
Preferred shares ($4 cumulative, convertible, 100,000 authorized, 4,600 issued)		345,000
Contributed surplus—reacquisition of common shares		29,200
Retained earnings		1,256,000

The following selected transactions occurred during the year:

Feb.	11	Issued 48,000 common shares at $20 per share.
Mar.	2	Reacquired 19,100 common shares at $22 per share.
June	14	Split the common shares 2 for 1 when the common shares were trading at $30 per share.
July	25	Reacquired 340 preferred shares at $70 per share.
Sept.	16	Reacquired 48,000 common shares for $17 per share.
Oct.	27	Declared a 5% common stock dividend distributable on December 13 to shareholders of record on November 24. The fair value of the common shares on October 27 was $19 per share.
Dec.	13	Distributed the stock dividend declared on October 27. The fair value of the common shares on December 13 was $21 per share.

1. Prepare journal entries for the transactions.

2. Show how each class of shares will be presented in the shareholders’ equity section of the balance sheet at December 31.

Pls show all calculations

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