Problem 145A On January 1 2017 Shellenburger Inc had the fol

Problem 14-5A On January 1, 2017, Shellenburger Inc. had the following stockholders\' equity account balances. Common Stock, no-par value (460,000 shares issued) Common Stock Dividends Distributable 1,840,000 194,500 586,500 Retained Earnings During 2017, the following transactions and events occurred. 1. Issued 46,000 shares of common stock as a result of a 10% stock dividend declared on December 15, 2016. 2. Issued 28,350 shares of common stock for cash at $5 per share. 3. Corrected an error that had understated the net income for 2015 by $71,000 4. Declared and paid a cash dividend of $78,050. 5. Earned net income of $256,500.

Solution

SHELLENBURGER INC Partial Balance Sheet As on December 31, 2017 Total Liabilities & Stockholders\' Equity: Stockholders\' Equity: Common stock, no par value (534350 shares issued) 2176250 Retained earnings 835950 Total stockholders\' equity 3012200 CALCULATIONS: Common stock: # of shares Amount Beginning balance 460000 1840000 Common stock dividends distributed 46000 194500 Shares issued during the year 28350 141750 534350 2176250 RETAINED EARNINGS: Beginning balance 586500 Add: Net income 256500 Add: Correction of error in 2015 for understatement 71000 Less: Cash dividend -78050 Ending balance of retained earnings 835950