On July 1, Year 1, Village Bookstore, Inc. appropriated retained earnings in the

Question

On July 1, Year 1, Village Bookstore, Inc. appropriated retained earnings in the amount of $36,000 for a future remodeling project in the basement of the bookstore. On June 30, Year 1, the balance of Retained Earnings was $82,800 and the Cash balance was $43,200. Which of the following answers shows the effect of the July 1 event on the financial statements? Stockholders' Equity Assets-Liab.-I c. 1+1 Ret. A NA- NA1+1-NA-t+ (36,000) + 36,000 -NA CNA NA NA+ +Ret.+App.R.E Rev.Exp.Net Inc Cash Stk Earn. _NA_ (36,000) FA NA NA +NA NA NANA (36, 000) +36, 000 NANANA NA NA NANANA

Explanation / Answer

Choice D is the correct answer

Appropiration had no effect on the statement of cash flow therefore choices 1 & 2 are wrong. the option D shows the correct effect of the appropiration on the retained earnings.

Choice D is the correct answer

Appropiration had no effect on the statement of cash flow therefore choices 1 & 2 are wrong. the option D shows the correct effect of the appropiration on the retained earnings.

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