On January 1, 2020, Sunland Corporation had the following stockholders’ equity accounts.
Common Stock ($24 par value, 65,000 shares issued and outstanding) $1,560,000
Paid-in Capital in Excess of Par—Common Stock 191,000
Retained Earnings 591,000
During the year, the following transactions occurred.
Feb. 1 Declared a $1 cash dividend per share to stockholders of record on February 15, payable March 1.
Mar. 1 Paid the dividend declared in February.
Apr. 1 Announced a 2-for-1 stock split. Prior to the split, the market price per share was $36.
July 1 Declared a 10% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $14 per share.
31 Issued the shares for the stock dividend.
Dec. 1 Declared a $0.30 per share dividend to stockholders of record on December 15, payable January 5, 2021.
31 Determined that net income for the year was $328,000.
Date Account Titles and Explanation Debit Credit
Feb. 1 Cash Dividends 65,000
Dividends Payable 65,000
Mar. 1 Dividends Payable 65,000
Cash 65,000
Apr.1 No Entry
No Entry
July 1 Stock Dividends
Paid-in Capital in Excess of Par-Preferred Stock
Common Stock Dividends Distributable
July 31 Common Stock Dividends Distributable
Common Stock
Dec. 1 Cash Dividends
Dividends Payable
Dec. 31 Income Summary 328,000 328,000
Retained Earnings
(To close net income)
Dec. 31 Retained Earnings
Stock Dividends
(To close stock dividends)
Dec. 31 Retained Earnings
Cash
(To close cash dividends) Debit Credit Balance Common Stock Date Jan. 1 July 31 Explanation Ref Balance Common Stock Dividends Distributable Date Explanation Ref Debit Credit Balance July 1 July 31 Paid-in Capital in Excess of Par-Common Stock Date Explanation Ref Debit Jan. 1 Balance Credit Balance July 1 Retained Earnings Date Jan. 1 Debit Credit Balance Explanation Ref Balance Dec. 31 Net income Dec. 31 Stock dividend Dec. 31 Cash dividend Cash Dividends Explanation Ref Debit Credit Balance Feb. 1 Dec. 1 Dec. 31 Stock Dividends Date Jan. 1 Explanation Ref Debit Credit Balance Dec. 31 SUNLAND CORPORATION Balance Sheet (Partial)