Sheridan Company has 80,000 common shares outstanding. Because it wants to retain its cash for other purposes, the company decided to issue stock dividends to its shareholders. The marketprice of each Sheridan Company share was $24.(a)Prepare the journal entries if the company decides to declare and issue a 9% stock dividend. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If noentry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)Account and ExplanationWhen declared:When issued:DebitAccount and ExplanationCreditPrepare the journal entry if instead of declaring the stock dividend the company decides to split its shares two-for-one. (Credit account titlesare automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles andenter o for the amounts. List debit entry before credit entry.)DebitCredit What should happen to the market price of the company's shares if the company decides to declare and issue a 9% stock dividend? (Roundanswer to 2 decimal places, e.g. 24.62.)Share price after the 9% stock dividend $What should happen to the market price of the company's shares if instead of declaring the stock dividend the company decides to split itsshares two-for-one? (Round answer to 2 decimal places, e.g. 24.62.)Share price after a 2-for-1 stock split$

The stock dividend is declared to the shareholders from the retained earnings of the business.The…

Answered: Sheridan Company has 80,000 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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