Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2018. At January 1, 2018, the corporation had outstanding 105.0 million common shares, $1.5 par per share. Retained Earnings ($ in millions) 106 Beginning balance Retirement of 5.0 million common shares for $36.0 million 3.80 82 Net income for the year Declaration and payment of a $0.38 per share cash dividend 38.00 Declaration and distribution of a 5% stock dividend 34.50 111.70 Ending balance Required:

1. Prepare the journal entries to record the transactions that affected Brenner-Jude's retained earnings during 2018 based on the information provided.

2. Prepare a statement of retained earnings for Brenner-Jude for the year ended 2018.