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Help Seve & Exit Sub y work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion Return to questios Shown below in T-account format are the changes affecting the retained earnings of Forge Corporation during 2018. At January 1, 2018, the corporation had outstanding 105 million common shares, $1 par per share in Beginning balance Retirement of 5,lion common shares for $29 illion Net incone for the year Declaration and payment of a 32 50.32 per share cash dividend Declarat lon and distribution of a 28 Ending balance Required: 1. From the information provided by the account changes you should be able to recreate the transactions that affected Forge's retained earnings during 2018. Prepare the journal entries that Forge must have recorded during the year for these transactions 2. Prepare a statement of retained earnings for Forge for the year ended 2018. Answer is not complete. by entering your answers in the tabs below. Required 1 Required 2 From the information provided by the account changes you should be able to recreate the transactions that affected Forge's retained earnings during 2018. Prepare the journal entries that Forge must have recorded during the year for these transactions. (If no entry is required for a transaction/event, select "No lournal entry required" in the first account field. Enter

Explanation / Answer

Solution:

Part 1 --- Correct journal entries

Here I am providing the correct journal entries of the incorrect amount and account titles

No.

Event

General Journal

Debit

Credit

1

1

Common Stock

$5

Additional Paid in Capital

$21

Retained Earnings

$3

Treasury Stock

$29

3

3

Retained Earnings

$32

Cash Dividends

$32

4

4

Retained Earnings

$28

Stock Dividends

$28

Part 2 --- Statement of Retained Earnings

Statement of Retained Earnings

$$

Balance at January 1

$100

Net Income for the year

$84

Deductions:

Retirement of common stock

$3

Cash dividends

$32

Stock Dividend

$28

Balance at December 31

$121

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No.

Event

General Journal

Debit

Credit

1

1

Common Stock

$5

Additional Paid in Capital

$21

Retained Earnings

$3

Treasury Stock

$29

3

3

Retained Earnings

$32

Cash Dividends

$32

4

4

Retained Earnings

$28

Stock Dividends

$28

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