Chapter 10 Retained Earnings, Dividends and Treasury Stocks ill be taken out Assignment Materials The Retained Earnings account showed a credit balance of P150,000 on January 1, 2006 capitalized on a after closing the books of accounts on December 31, 2005, end of the fiscal year. The following errors were discovered after closing: a) Accrued salaries not recorded, P10,000 b) Merchandise Inventory Dec. 31 was understated by P4,000 s' equity will c) Depreciation was overstated by P1,000 d) Expired portion of Prepaid Insurance not recorded, P2,000 Required: 1. Compute the corrected Retained Earnings balance, January 1, 2006. P105 per share, 2. Prepare the necessary adjusting entries to correct the Retained Earnings Treasury Stock account. II stock dividend, Bacolod Sugarland Corporation has a Retained Earnings balance of P850,000 on ockholders on January 1. 2006. At the end of 2006, the corporations' net income was P160,000. During the early part of 2006, the following appropriations to Retained Earnings were made: a) For Plant Expansion P250,000 b) For Treasury Stock 80,000 d, how much is A cash dividend of P100,000 was declared and paid during 2006. Required: 1. Journal entry to close 2006 Net Income to Retained Earnings. 2. Journal entry to record Appropriation of Retained Earnings. 3. Journal entry to declare and pay dividends. 4. Prepare Statement of Retained Earnings for the year ended 31 December 2006. 5. If at the middle part of 2007, the plant expansion is completed, what is the necessary journal entry to return the appropriation to Retained Earnings, Free or Unappropriated? 419Re/umcd - i ' C hapter I 0 . The follomng corporate dlta were taken- from the records of Negros Grams, C an (IE Incorporated: . , 7% Preferred Stock,'P50 par - 72,000 shares were issued 1' Common Stock, P100 - 3,000 shares Were issued ' Retained Earnings, P110,000 ' , P80,000 is declared as cash dividends. No dividends were declared in the past T ' two veers. ' ' r No 5 Required: 1. Proforma journal entries to record the declaration and payment- of cash Required: dividends when there are two classes of stocks being issued; ' . f 1. v ; 2. Prepare a Schedule of Cash Dividends Distribution showing the dividends per 7 T ' share assuming that preferred shares are: _ fl a) Non-cumulative and Nonparticipating ' _ ff b) Cumulative and Non-participating _ " ' c) Non-cumulative and Fully Participating 2' (1) Cumulative and Fully Participating