Question 4 Partially correct Mark 2.67 out of 5.00 P Flag question Retained Earnings: Transactions and Statement The stockholders' equity of Cyclone Corporation at January 1 follows: $750,000 6 Percent preferred stock, $25 par value, 50,000 shares authorized; 30,000 shares issued and outstanding Common stock, $5 par value, 300,000 shares authorized; 90,000 shares issued and outstanding Paid-in capital in excess of par value-Common stock Retained earnings Total Stockholders' Equity 450,000 560,000 830,000 $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 Jun. 18 Stock Dividends Stock Dividends Distributable Declared stock dividend. Credit Debit 700,000 x $ $ 0 0 OX Credit Debit 700,000 X $ $ 0 0 0 x a. Prepare journal entries to record the foregoing transactions. General Journal Date Description Jun.18 Stock Dividends Stock Dividends Distributable Declared stock dividend. Jul. 1 Stock Dividends Distributable Common Stock Issued common shares as stock dividend. Dec.20 Cash Dividends Dividends Payable - Preferred Stock Dividends Payable - Common Stock Declared a cash dividend on preferred and common stock outstanding. 20,000 x 0 0 20,000 x 0 x 0 0 0 X 0 0 x 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 $ OX Add: Net Income 0 x Ox 0 x Less: Cash Dividends De $ Stock Dividends Declared 0 X 0 x Retained Earnings, Dec $ 0 x