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Retained Earnings: Transactions and Statement The stockholders’ equity of Ranger Corporation at January 1 appears below:...

Retained Earnings: Transactions and Statement

The stockholders’ equity of Ranger Corporation at January 1 appears below:

Common stock, $10 par value, 200,000 shares authorized;
80,000 shares issued and outstanding $800,000
Paid-in capital in excess of par value 480,000
Retained earnings 305,000

During the year, the following transactions occurred:

May 12 Declared a 15 percent stock dividend; market value of the common stock was $22 per share.
June 6 Issued the stock dividend declared on May 12.
Dec. 5 Declared a cash dividend of $1.50 per share.
30 Paid the cash dividend declared on December 5.

Required

a. Prepare journal entries to record the foregoing transactions.

General Journal
Date Description Debit Credit
May 12 AnswerStock DividendsStock Dividends DistributablePaid-in-Capital in Excess of Par ValueCommon StockCash DividendsDividends PayableCash Answer Answer
Stock Dividends Distributable Answer Answer
AnswerStock DividendsStock Dividends DistributablePaid-in-Capital in Excess of Par ValueCommon StockCash DividendsDividends PayableCash Answer Answer
Declared stock dividend.
Jun.06 AnswerStock DividendsStock Dividends DistributablePaid-in-Capital in Excess of Par ValueCommon StockCash DividendsDividends PayableCash Answer Answer
Common Stock Answer Answer
Issued common shares as stock dividend.
Dec.05 AnswerStock DividendsStock Dividends DistributablePaid-in-Capital in Excess of Par ValueCommon StockCash DividendsDividends PayableCash Answer Answer
AnswerStock DividendsStock Dividends DistributablePaid-in-Capital in Excess of Par ValueCommon StockCash DividendsDividends PayableCash Answer Answer
Declared a cash dividend on common stock outstanding.
Dec.30 AnswerStock DividendsStock Dividends DistributablePaid-in-Capital in Excess of Par ValueCommon StockCash DividendsDividends PayableCash Answer Answer
AnswerStock DividendsStock Dividends DistributablePaid-in-Capital in Excess of Par ValueCommon StockCash DividendsDividends PayableCash Answer Answer
Paid cash dividend declared on Dec. 5.

b. Prepare a statement of retained earnings. Net income for the year is $275,000.

Do not use negative signs with your answers.

RANGER CORPORATION
Statement of Retained Earnings
For the Year Ended December 31
Retained Earnings, January 1 Answer
AnswerNet IncomeRetained Earnings, December 31Cash Dividends Declared Answer
Answer
AnswerNet IncomeRetained Earnings, December 31Cash Dividends Declared Answer
Stock Dividends Declared Answer Answer
AnswerNet IncomeRetained Earnings, December 31Cash Dividends Declared Answer

Solutions

Expert Solution

Requirement:1

General Journal
Date Description Debit Credit
May. 12 Retained Earnings [80000*15%*22] $ 264,000
Common Stock Dividend Distributable [80000*15%*10] $ 120,000
Paid-in capital in excess of par value-common stock [80000*15%*12] $ 144,000
( To record stock dividend declaration)
June. 6 Common Stock Dividend Distributable [80000*15%*10] $ 120,000
Common Stock $ 120,000
( To record stock dividend distribution)
Dec. 5 Cash Dividend (80000+(80000*15%))*1.5 $ 138,000
Dividend Payable-Common Stock $ 138,000
[To record cash dividend declared]
Dec. 30 Dividend Payable-Common Stock $ 138,000
Cash $ 138,000
[To record cash dividend paid]

Requirement:2

RANGER CORPORATION
Statement of Retained Earnings
For the Year Ended December 31
Retained Earnings, January 1 $                     305,000
Add:Net Income $                     275,000
Less:
Cash Dividends Declared 138000
Stock Dividends Declared 264000 $                   (402,000)
Retained Earnings, December 31 $                     178,000

ekkarill92 answered 1 year ago
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