Corporation

Problem #12 Retained Earnings: Transactions and Statement The shareholders' equity of C. Laguna Corporation at Jan. 1, 2020, appeared below: Ordinary Shares, P50 par, 200,000 shares authorized, 80,000 shares issued and outstanding P4,000,000 Share Premium 5,390,000 Retained Earnings 2,850,000 During 2020, the following transactions occurred: June 7 Declared a 10% share dividend; market value of the ordinary shares was P120 per share. 28 Issued the share dividend declared on June 7. Dec. 5 Declared a cash dividend of P10 per share. 26 Paid the cash dividend declared on Dec. 5. 31 Closed profit of P2,380,000 from the income summary account to retained earnings. 31 Closed the dividend accounts to retained earnings. Required: 1. Prepare journal entries to record the foregoing transactions. 2. Prepare the retained earnings statement for 2020