RETAINED EARNINGS ACCOUNTS AND STATEMENT On January 1, 20--, Glover Companys retained earnings accounts had the following

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RETAINED EARNINGS ACCOUNTS AND STATEMENT On January 1, 20--, Glover Company’s retained earnings accounts had the following balances:

Appropriated for land acquisition......$ 60,000

Unappropriated retained earnings.......900,000

....................$960,000

During the year ended December 31, 20--, Glover completed the following selected transactions:

Mar. 20 Declared a semiannual dividend of $0.80 per share on preferred stock and $0.25 per share on common stock to shareholders of record on April 10, payable on April 15.

Currently, 10,000 shares of $50 par preferred stock and 100,000 shares of $5 par common stock are outstanding.

Apr. 15 Paid the cash dividends.

June 16 Last year, Glover’s board of directors appropriated $180,000 over a three-year period for the purchase of land for a future building site. Made this year’s appropriation for $60,000.

Oct. 10 Declared semiannual dividend of $0.80 per share on preferred stock and $0.25 per share on common stock to shareholders of record on November 5, payable on

November 10.

Nov. 10 Paid the cash dividends.

17 Declared a 5% stock dividend to shareholders of record on December 8, distributable on December 15. Market value of the common stock was estimated at $18 per share.

Dec. 15 Issued certificates for common stock dividend.

31 Net income for 20-- was $290,000. Closed the income summary account.

31 Closed the cash dividends and stock dividends accounts.

REQUIRED

1. Prepare journal entries for the transactions.

2. Post all entries affecting the appropriated and unappropriated retained earnings accounts to T accounts.

3. Prepare a retained earnings statement for the year ended December 31, 20--.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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College Accounting

ISBN: 978-0538745192

20th Edition

Authors: Heintz and Parry

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