Murphy Products Ltd.s statement of financial position includes total assets of $3,873,000 and the following equity account balances at December 31, 2022:

Murphy Products Ltd.s

Statement of Financial Position (Partial)

December 31, 2022

1	Common shares, no par, 10,000 shares issued and outstanding	$97,000.00
2	Retained earnings	418,000.00
3	Total shareholders equity	$515,000.00

Murphys common shares is selling for $22 per share on December 31, 2022.

Required:

1.	Determine how much Murphy Products would have reported for total assets and retained earnings on December 31, 2022, if the firm had declared and paid a $26,000 cash dividend on December 31, 2022. Prepare the journal entry for this cash dividend.
2.	Determine how much Murphy would have reported for total assets and retained earnings on December 31, 2022, if the firm had issued a 14% stock dividend on December 31, 2022. Prepare the journal entry for this stock dividend.
3.	Conceptual Connection: How much would Murphy have reported for total assets and retained earnings on December 31, 2022, if the firm had effected a 3-for-1 stock split on December 31, 2022? Is a journal entry needed to record the stock split?

CHART OF ACCOUNTS
Murphy Products Ltd.s
General Ledger
ASSETS 111 Cash 112 Petty Cash 121 Accounts Receivable 123 Allowance for Doubtful Accounts 124 Notes Receivable 125 Supplies 126 Prepaid Insurance 127 Prepaid Rent 128 Inventory 129 Interest Receivable 130 Investment 131 Land 132 Buildings 133 Equipment 134 Furniture 135 Trucks 139 Accumulated Depreciation 141 Leased Assets LIABILITIES 211 Accounts Payable 212 Utilities Payable 213 Insurance Payable 214 Wages Payable 215 Rent Payable 221 Interest Payable 223 Income Taxes Payable 231 Dividends Payable 232 Unearned Sales Revenue 233 Unearned Rent Revenue 241 Bonds Payable 251 Notes Payable EQUITY 311 Common Shares 312 Additional Paid-In Capital-Common Shares 313 Preferred Stock 314 Additional Paid-In Capital-Preferred Shares 315 Treasury Stock 316 Additional Paid-In Capital-Treasury Shares 321 Retained Earnings 331 Dividends	REVENUE 411 Sales Revenue 412 Service Revenue 413 Interest Income 414 Rent Revenue EXPENSES 511 Cost of Goods Sold 512 Advertising Expense 513 Supplies Expense 514 Utilities Expense 515 Insurance Expense 516 Service Charge Expense 517 Bad Debt Expense 518 Rent Expense 521 Wages Expense 531 Interest Expense 541 Depreciation Expense 551 Income Taxes Expense 552 Legal Expense

1a. Determine how much Murphy Products would have reported for total assets and retained earnings on December 31, 2022, if the firm had declared and paid a $26,000 cash dividend on December 31, 2022.

Total assets
Retained earnings

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1b. Prepare the journal entry for this cash dividend on December 31.

PAGE 1

GENERAL JOURNAL

IMPACT ON FINANCIAL STATEMENTS

INCOME STATEMENT

BALANCE SHEET

	DATE	ACCOUNT	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY	REVENUE	EXPENSES	NET INCOME
1
2

2b. Prepare the journal entry for this stock dividend on December 31.

PAGE 1

GENERAL JOURNAL

IMPACT ON FINANCIAL STATEMENTS

INCOME STATEMENT

BALANCE SHEET

	DATE	ACCOUNT	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY	REVENUE	EXPENSES	NET INCOME
1
2

2a. Determine how much Murphy would have reported for total assets and retained earnings on December 31, 2022, if the firm had issued a 14% stock dividend on December 31, 2022.

Total assets
Retained earnings

3. Conceptual Connection: How much would Murphy have reported for total assets and retained earnings on December 31, 2022, if the firm had effected a 3-for-1 stock split on December 31, 2022?

Total assets
Retained earnings

Is a journal entry needed to record the stock split?

No

Yes