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In: Accounting

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

Retained Earnings: Transactions and Statement

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

Common stock, $10 par value, 300,000 shares authorized;
105,000 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 9 percent stock dividend; market value of the common stock was $21 per share.
June 6 Issued the stock dividend declared on May 12.
Dec. 5 Declared a cash dividend of $1.00 per share.
30 Paid the cash dividend declared on December 5.

Required

a. Prepare journal entries to record the foregoing transactions.

b. Prepare a statement of retained earnings. Net income for the year is $303,000.

Do not use negative signs with your answers.

Solutions

Expert Solution

a.. Journal Entry  
Date Detail Debit Credit
12-May Retained Earning $198,450.00
Common Stock Dividend Distributable ( 9450 Share @ $10) $94,500.00
Paid in Capital Excess Par Value ( 9450 Share @ $11) $103,950.00
( Being 9% stock dividedend declared , @21 , 105000 Share *9%)
06-Jun
Common Stock Dividend Distributable $94,500.00
Common Stock $94,500.00
Being Common Stock issued
05-Dec Retained Earning $114,450.00
Dividend Payable $114,450.00
(Being Cash dividend declared (105000+9450)*$1/ Share)
30-Dec Dividend Payable $114,450.00
Cash $114,450.00
( Being Dividend Paid)
Statement of Retained Earning
Opening Balance of Retained Earning $305,000.00
+ Net Income for the Year $303,000.00
- Stock Dividedn declared $198,450.00
- Cash Dividend Declared & Paid $114,450.00
Closing Balance of Retained Earning $295,100.00

ekkarill92 answered 1 year ago
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