Question
Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2021. At January 1, 2021, the corporation had outstanding
Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2021. At January 1, 2021, the corporation had outstanding 106 million common shares, $1 par per share.
Retained Earnings ($ in millions) | |||
108 | Beginning balance | ||
Retirement of 6 million common shares for $37 million | 6 | ||
97 | Net income for the year | ||
Declaration and payment of a $0.40 per share cash dividend | 40 | ||
Declaration and distribution of a 5% stock dividend | 23 | ||
136 | Ending balance |
Required: 1. From the information provided by the account changes, you should be able to recreate the transactions that affected Brenner-Judes retained earnings during 2021. Prepare the journal entries that Brenner-Jude must have recorded during the year for these transactions. (Hint: In lieu of revenues and expenses, use an account titled Income summary to close net income or net loss.) 2. Prepare a statement of retained earnings for Brenner-Jude for the year ended 2021.
Record the retirement of common shares.
Record the closing entry for net income.
Record the declaration and payment of a cash dividend.
Record the declaration and distribution of a stock dividend
Prepare a statement of retained earnings for Brenner-Jude for the year ended 2021. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)
|
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