Question 2 Answer saved Marked out of 15.00 P Flag question Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Palepu Company at December 31, 2015, appears below. Common stock, $10 par value, 200,000 shares authorized 75,000 shares issued and outstanding $800,000 Paid-in capital in excess of par value 480,000 Retained earnings 305,000 During 2016, the following transactions occurred May 12 Declared and issued a 7% stock dividend; the common stock market value was $18 per share. Dec 31 Declared and paid a cash dividend of 70 cents per share. Required a. Using the financial statement effects template, illustrate the effects of these transactions Income Statement Balance Sheet Noncash Assets Liabilities Transaction 5/12 Declared and paid stock dividend Cash Asset 5 Contrib. Capital - Earned Capital $52.500 Revenues. Expenses - Net Income 12/31 Declared and issued cash dividend b. Prepare the journal entries for these transactions General Journal Date Description Debit Credit 5/12 Retained earnings Common Stock Additional paid in capital 12/31 Retained earnings Cash d. Prepare a retained earnings reconciliation for 2016 assuming that the company reports 2016 net income of $283,000. Hint: Do not use negative signs with answers below. PALEPU COMPANY Statement of Retained Earnings For the Year Ended December 31, 2016 Retained earnings, December 31, 2015 Add: Net income Less Cash dividends declared 5 Stock dividends declared | Retained earnings, December 31, 2016 Next Previous Save Answers