Question

Marin Inc., a private company, is authorized to issue an unlimited number of common shares and 180,000 noncumulative $3 preferred shares. It began operations on January 1, 2021, and the following are selected transactions during 2021.

Jan.	1		Issued 400,000 common shares for $200,000 cash.
	2		Issued 40,000 preferred shares for $50 cash per share.
Dec.	1		Declared a total of $225,000 in dividends, payable on January 5, to shareholders of record on December 13.
	31		Determined that it had total revenues of $935,000 and operating expenses of $630,000.

Marin elected to report under ASPE. It has a 15% income tax rate and paid income tax instalments during the year of $39,750.

Record the share issue and dividend transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1Jan. 2Dec. 1Dec. 31
	(To record issuance of shares.)
Jan. 1Jan. 2Dec. 1Dec. 31
	(To record issuance of shares.)
Dec. 1
	(To record declaration of dividend.)

eTextbook and Media

List of Accounts

  

  

Prepare a partial income statement starting with profit before income tax and record an adjusting entry for income tax. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

MARIN INC. Income Statement (Partial)                                                                       Quarter Ended December 31, 2021Year Ended December 31, 2021December 31, 2021
Other ExpensesRetained Earnings, December 31Operating ExpensesProfit Before Income TaxInvestmentsPreferred Share DividendsGross ProfitCommon Share DividendsProfit/(Loss)Retained Earnings, January 1		$
Retained Earnings, December 31Operating ExpensesProfit Before Income TaxProfit/(Loss)Preferred Share DividendsGross ProfitOther ExpensesCommon Share DividendsRetained Earnings, January 1Investments		$

Date	Account Titles and Explanation	Debit	Credit
Dec. 31
	(To record income tax expense.)

eTextbook and Media

List of Accounts

  

  

Prepare a statement of retained earnings. (List items that increase retained earnings first.)

MARIN INC. Statement of Retained Earnings                                                                       Quarter Ended December 31, 2021Year Ended December 31, 2021December 31, 2021
Gross ProfitRetained Earnings, December 31Profit/(Loss)Other ExpensesProfit Before Income TaxInvestmentsRetained Earnings, January 1Common Share DividendsPreferred Share DividendsOperating Expenses		$
AddLess:                                                                       InvestmentsPreferred Share DividendsCommon Share DividendsGross ProfitProfit/(Loss)Profit Before Income TaxRetained Earnings, January 1Retained Earnings, December 31Other ExpensesOperating Expenses
AddLess:
Other ExpensesPreferred Share DividendsCommon Share DividendsInvestmentsProfit Before Income TaxOperating ExpensesProfit/(Loss)Retained Earnings, December 31Gross ProfitRetained Earnings, January 1	$
Profit Before Income TaxPreferred Share DividendsOther ExpensesRetained Earnings, January 1Profit/(Loss)Gross ProfitInvestmentsCommon Share DividendsOperating ExpensesRetained Earnings, December 31
Gross ProfitProfit/(Loss)Operating ExpensesInvestmentsProfit Before Income TaxRetained Earnings, January 1Common Share DividendsRetained Earnings, December 31Other ExpensesPreferred Share Dividends		$

Answer 1