Comparative statements of retained earnings for Renn-Dever Corporation were repo

Question

Comparative statements of retained earnings for Renn-Dever Corporation were reported in its 2016 annual report as follows. RENN-DEVER CORPORATION Statements of Retained Earnings For the Years Ended December 31.2016 Balance at beginning of year Net income (loss) Deductions 2015 $7,084,952 $5,752,052 $5,924,552 3,508,700 2,400,900 (172,500) 2014 Stock dividend (37,000 shares) Common stock cash dividends Balance at end of year 259,000 shares retired (130,000 shares) 260,000 949,950808,000 $9,384,702 $7,084,952 $5,752,052 At December 31,2013, common shares consisted of the following Common stock, 1,910,000 shares at $1 par Paid-in capital-excess of par $1,910,000 9,550,000 Required: Infer from the reports the events and transactions that affected Renn-Dever Corporation's retained earnings during 2014, 2015, and 2016. Prepare the journal entries that reflect those events and transactions. (lf no entry is required for à transaction/event, select "No joumal entry required" in the first account field.) View transaction list Journal entry worksheet 2 Record transfer of net loss to retained eaninos

Explanation / Answer

Year General journal Debit Credit 2014 Retained earnings 172500 Profit and loss 172500 [ transfer of net loss] 2015 Profit and loss 2400900 Retained earnings 2400900 [ transfer of net income] 2016 Common stock 130000 Additional paid in capital 650000 Retained earnings 260000 To cash/Treasury stock 1040000 [Shares retired: 130000 Common stock 130000 Additional paid in capital 130000*5 650000 Retained earnings 260000 Total cash 1040000 2016 Retained earnings 808000 Dividends payable 808000 [ Dividends on common stock] 2017 Profit and loss 3508700 Retained earnings 3508700 [ transfer of net income] 2016 Retained earnings 259000 Common stock 37000 Additional paid in capital 222000 [Stock dividend] 2017 Retained earnings 949950 Dividends payable 949950 [ Dividends on common stock]

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