Section B drop-down option are Cash, Common Stock, Additional Paid-in Capital, or Retained Earnings

Section d. dropdown choices are: Net Income, Cash Dividends Declared, or Stock Dividends Declared

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; 85,000 shares issued and outstanding $800,000 Paid-in capital in excess of par value 480,000 Retained earnings 315,000 During 2016, the following transactions occurred: May 12 Declared and issued a 8% stock dividend; the common stock market value was $18 per share. Dec. 31 Declared and paid a cash dividend of 75 cents per share. a. Using the financial statement effects template, illustrate the effects of these transactions. Use negative signs with answers when appropriate. When applicable, enter total amount for contributed capital. Balance Sheet Income Statement Contrib. Noncash Earned = Liabilities + Capital Transaction apital Cash Asset + Revenues- Expenses =Net Incon Asset + 5/12 Declared and paid stock dividend 0 0= 0+ 0+ 0 0 0 12/31 Declared and issued cash dividend 0 + 0 0 0 0 0 0 b. Prepare the journal entries for these transactions. General Journal Description Debit Credit Date 5/12 0 0 Common Stock 0 0 0 0 12/31 0 0 0 c. Post the journal entries from b to the related T-accounts. Cash (A) Common Stock (SE) Retained Earnings (SE) 5/12 0 0 5/12 0 0 5/12 0 0 12/31 12/31 0 0 12/31 0 Additional Paid-in Capital (SE) 5/12 0 0 12/31 0 d. Prepare a retained earnings reconciliation for 2016 assuming that the company reports 2016 net income of $283,000. 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 $ 0 Add: 0 0 Less: Cash dividends declared $ 0 Retained earnings, December 31, 2016 0 LA A