Retained Earnings: Transactions and Statement

The stockholders equity of Cyclone Corporation at January 1 follows:

6 Percent preferred stock, $25 par value, 50,000 shares authorized;
30,000 shares issued and outstanding	$750,000
Common stock, $5 par value, 300,000 shares authorized; 90,000 shares
issued and outstanding	450,000
Paid-in capital in excess of par value-Common stock	560,000
Retained earnings	830,000
Total Stockholders' Equity	$2,590,000

The following transactions, among others, occurred during the year:

June	18	Declared a 50 percent stock dividend on all outstanding shares of common stock. The market value of the stock was $14 per share.
July	1	Issued the stock dividend declared on June 18.
Dec.	20	Declared the annual cash dividend on the preferred stock and a cash dividend of $1.30 per share on the common stock, payable on January 20 to stockholders of record on December 28.

Required

a. Prepare journal entries to record the foregoing transactions.

General Journal
Date	Description	Debit	Credit
Jun.18	AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock	Answer	Answer
	AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock	Answer	Answer
	Declared stock dividend.
Jul.1	AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock	Answer	Answer
	AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock	Answer	Answer
	Issued common shares as stock dividend.
Dec.20	AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock	Answer	Answer
	AnswerStock DividendsStock Dividends DistributableCommon StockCash DividendsDividends Payable - Preferred StockDividends Payable - Common Stock	Answer	Answer
	Dividends Payable - Common Stock	Answer	Answer
	Declared a cash dividend on preferred and common stock outstanding.

b. Prepare a statement of retained earnings. The net income for the year is $380,000.

Do not use negative signs with your answers.

CYCLONE CORPORATION Statement of Retained Earnings For the Year Ended December 31
	Retained Earnings, January 1		Answer
	AnswerNet IncomeRetained Earnings, December 31Cash Dividends Declared		Answer
			Answer
	AnswerNet IncomeRetained Earnings, December 31Cash Dividends Declared	Answer
	Stock Dividends Declared	Answer	Answer
	AnswerNet IncomeRetained Earnings, December 31Cash Dividends Declared		Answer