On January 1, 2021, Sheridan Incorporated had an unlimited number of common shares authorized, 230,000 issued, and the balance in the Common Shares account was $2.3 million. The company reported a balance in Retained Earnings on this date of $890,000 and accumulated other comprehensive income of $27,000. During the year, the following occurred: 1. 2. 3. 4. 5. Issued 80,000 common shares at $14 per share on July 1, Declared a 3-for-2 stock split on September 30 when the fair value was $18 per share. Declared a 5% stock dividend on December 9 to common shareholders of record at December 30, distributable on January 16, 2022. At the declaration date, the fair value of the common shares was $21 per share Earned profit of $400,000 for the year. Recognized a loss on equity investments of $45,000 before tax, which will be reported as other comprehensive income. The company's income tax rate is 25%.
On January 1, 2021, Sheridan Incorporated had an unlimited number of common shares authorized, 230,000 issued, and the balance in the Common Shares account was $2.3 million. The company reported a balance in Retained Earnings on this date of $890,000 and accumulated other comprehensive income of $27,000. During the year, the following occurred: 1. 2. 3. 4. 5. Issued 80,000 common shares at $14 per share on July 1, Declared a 3-for-2 stock split on September 30 when the fair value was $18 per share. Declared a 5% stock dividend on December 9 to common shareholders of record at December 30, distributable on January 16, 2022. At the declaration date, the fair value of the common shares was $21 per share Earned profit of $400,000 for the year. Recognized a loss on equity investments of $45,000 before tax, which will be reported as other comprehensive income. The company's income tax rate is 25%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Prepare a statement of changes in shareholders' equity for the year ended December 31, 2021. (Enter negative amounts using either a
negative sign preceding the number es -45 or parentheses eg. (451)
Balance,
January 11
Issued for cash
Stock split 3 for
2
Stock dividends
Comprehensive
income
Balance
December 31
$
Common
Shares
SHERIDAN CORPORATION
Statement of Changes in Shareholders' Equity
Stock Dividend
Distributable
Retained
Earnings
$
Accumulat
Comprel
Income
Transcribed Image Text:On January 1, 2021, Sheridan Incorporated had an unlimited number of common shares authorized, 230,000 issued, and the balance
in the Common Shares account was $2.3 million. The company reported a balance in Retained Earnings on this date of $890,000 and
accumulated other comprehensive income of $27,000. During the year, the following occurred:
1
2.
3.
4.
5
Issued 80,000 common shares at $14 per share on July 1.
Declared a 3-for-2 stock split on September 30 when the fair value was $18 per share.
Declared a 5% stock dividend on December 9 to common shareholders of record at December 30, distributable on January
16,2022. At the declaration date, the fair value of the common shares was $21 per shard.
Earned profit of $400.000 for the year.
Recognized a loss on equity investments of $45,000 before tax, which will be reported as other comprehensive income. The
company's income tax rate is 25%.
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