E 18-18 Transactions affecting retained earnings
Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2011. At January 1, 2011, the corporation had outstanding 105 million common shares, $1 par per share.
Retained Earnings ($ in millions)
90 Beginning balance
Retirement of 5 million common
Shares for $22 million 2
88 Net income for the year
Declaration and payment of a
$0.33 per share cash dividend 33
Declaration and distribution
Of a 4% stock dividend 20
123 ending balance
Required:
1. From the information provided by the account changes you should be able to recreate the transactions that affected Brenner-Jude’s retained earnings during 2011. Prepare the journal entries that Brenner-Jude must have recorded during the year for these transactions.
2. Prepare a statement of retained earnings for Brenner-Jude for the year ended 2011.
Click here for the solution: Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2011
