$17$

Exercise $8-17$A $($Static$)$ Determining how the appropriation of retained earnings affects financial statements LO $8-8$

On December $30,$ Billy's Boat Yard $($BBY$)$ had $$90,000$ of cash, $$20,000$ of liabilities, $$30,000$ of common stock, and $$40,000$ of unrestricted retained earnings. On December $31,$ BBY appropriated retained earnings in the amount of $$18,000$ for a future remodeling project.

Required

a$.$ Record the December $31$ appropriation in a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity $($OA$),$ investing activity $($IA$),$ or financing activity $($FA$).$

b$.$ Determine the amount of dividends that BBY can pay immediately after the December $31$ appropriation.

c$.$ Determine the total amount of retained earnings immediately after the December $31$ appropriation.

d$.$ Determine the total amount of cash immediately after the December $31$ appropriation.

Complete this question by entering your answers in the tabs below.

ReqA

Record the December $31$ appropriation in a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating ac $($IA$),$ or financing activity $($FA$).$

Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed.

$\backslash$table$[[$BBY COMPANY$],[$Horizontal Statements Model$],[$Balance Sheet,Income Statement,$\backslash$table$[[$Statement of Cash$],[$Flows$]]],[$Assets$,=,$Liabilities,$+,$Stockholders' Equity,Revenue,$-,$Expenses,$=,$Net Income$],[$Cash$,\backslash$table$[[$Common$],[$Stock$]],+,\backslash$table$[[$Retained$],[$Earnings$]],+,\backslash$table$[[$Appropriated$],[$Retained$],[$Earnings$]]],[90,000,=,20,000,+,30,000,+,18,000,+,(40,000),,-1,,=,,]]$