Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2021. At January 1, 2021, the corporation had outstanding 105 million common shares, $1 par per share. 

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 2021. Prepare the journal entries that Brenner-Jude must have recorded during the year for these transactions. (In lieu of revenues and expenses, use an account titled “Income summary” to close net income or net loss.) 

2. Prepare a statement of retained earnings for Brenner-Jude for the year ended 2021.

Transcribed Image Text:

Retained Earnings ($ in millions) 90 Beginning balance Retirement of 5 million common shares for $22 million 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 123 Ending balance 2. 20