PROBLEM 2 The following information is available for Grey Goose Inc.: Beginning
ID: 2505631 • Letter: P
Question
PROBLEM 2
The following information is available for Grey Goose Inc.:
Beginning retained earnings $600,000
Cash dividends declared 60,000
Net income for 2014 120,000
Stock dividend declared 15,000
Understatement of last year's depreciation expense 30,000
Instructions
Based on the preceding information, prepare a retained earnings statement for 2014 in the box below.
GREY GOOSE INC.
Retained Earnings Statement
For the Year Ended December 31, 2014
PROBLEM 3
Timber Ridge Corporation was organized on January 1, 2013. During its first year, the corporation issued 40,000 shares of $5 par value preferred stock and 400,000 shares of $1 par value common stock. At December 31, the company declared the following cash dividends:
2013 $ 8,000
2014 $30,000
2015 $70,000
Instructions
(a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 5% and not cumulative.
(b) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and cumulative.
(c) Journalize the declaration of the cash dividend at December 31, 2015 using the assumption of part (b).
(a) Preferred Common Total
2013
2014
2015
(b) Preferred Common Total
2013
2014
2015
(c)
Date
Account
Debit
Credit
Explanation / Answer
PROBLEM 2 <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
The following information is available for Grey Goose Inc.:
Beginning retained earnings $600,000
Cash dividends declared 60,000
Net income for 2014 120,000
Stock dividend declared 15,000
Understatement of last year's depreciation expense 30,000
Instructions
Based on the preceding information, prepare a retained earnings statement for 2014 in the box below.
GREY GOOSE INC.
Retained Earnings Statement
For the Year Ended December 31, 2014
PARTICULARS
Amount ($)
Amount ($)
Beginning Retained Earnings
600000
Add:Net Income
120000
Less: Cash Dividends
60000
Net Income transferred to Retained Earnings
60000
Less:Stock Dividend declared
15000
Less: Understatement of Last years depreciation
30000
Closing Balance of Retained Earnings
61500
PARTICULARS
Amount ($)
Amount ($)
Beginning Retained Earnings
600000
Add:Net Income
120000
Less: Cash Dividends
60000
Net Income transferred to Retained Earnings
60000
Less:Stock Dividend declared
15000
Less: Understatement of Last years depreciation
30000
Closing Balance of Retained Earnings
61500
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.