Question
E11-11 Recording the Payment of Dividends and Preparing a Statement of Retained Earnings The 2012 annual report for Sneer Corporation disclosed that the company declared
E11-11 Recording the Payment of Dividends and Preparing a Statement of Retained Earnings
The 2012 annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $100,000 in 2012. It also declared and paid dividends on common stock in the amount of $2 per share. During 2012, Sneer had 1,000,000 common shares authorized; 300,000 shares had been issued; 100,000 shares were in treasury stock. The balance in Retained Earnings was $800,000 on December 31, 2011, and 2012 Net Income was $300,000.
Required:
1. Prepare journal entries to record the declaration, and payment, of dividends on (a) preferred and (b) common stock.
2. Using the information given above, prepare a Statement of Retained Earnings for the year ended December 31, 2013.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started