Comparative statements of retained earnings for Renn-Dever Corporation were repo
ID: 2554925 • Letter: C
Question
Comparative statements of retained earnings for Renn-Dever Corporation were reported in its 2018 annual report as follows.
At December 31, 2015, common shares consisted of the following:
Required:
Infer from the reports the events and transactions that affected Renn-Dever Corporation’s retained earnings during 2016, 2017, and 2018. Prepare the journal entries that reflect those events and transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Statements of Retained Earnings For the Years Ended December 31, 2018 2017 2016 Balance at beginning of year $ 6,761,952 $ 5,513,052 $ 5,664,552 Net income (loss) 3,228,700 2,120,900 (151,500 ) Deductions: Stock dividend (30,500 shares) 213,500 Common shares retired (102,000 shares) 204,000 Common stock cash dividends 819,950 668,000 0 Balance at end of year $ 8,957,202 $ 6,761,952 $ 5,513,052
Explanation / Answer
Answer:
Date
Description
Debit $
Credit $
2016
Retained earnings
151500
Income summary
151500
2017
Income summary
2120900
Retained earnings
2120900
Common stock (102000*1)
102000
Paid-in capital-excess of par
(6860,000/1715000)*102000
408000
Retained earnings (given)
204000
Cash (plug)
714000
Retained earnings
668000
Cash
668000
2018
Income summary
3228700
Retained earnings
3228700
Retained earnings (given)
213500
Common stock (30,500 x $1)
30500
Paid-in capital – excess of par (plug)
183000
Retained earnings
819950
Cash
819950
Date
Description
Debit $
Credit $
2016
Retained earnings
151500
Income summary
151500
2017
Income summary
2120900
Retained earnings
2120900
Common stock (102000*1)
102000
Paid-in capital-excess of par
(6860,000/1715000)*102000
408000
Retained earnings (given)
204000
Cash (plug)
714000
Retained earnings
668000
Cash
668000
2018
Income summary
3228700
Retained earnings
3228700
Retained earnings (given)
213500
Common stock (30,500 x $1)
30500
Paid-in capital – excess of par (plug)
183000
Retained earnings
819950
Cash
819950
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