Question
In: Accounting
The statement of retained earnings of Gary Larson Publishers is presented below. GARY LARSON PUBLISHERS Statement...
The statement of retained earnings of Gary Larson Publishers is
presented below.
|
GARY LARSON PUBLISHERS |
||||
| Retained earnings, January 1 | $ | 290 | ||
| Add: | Net income | 56 | ||
| Deduct: | Cash dividend | (21 | ) | |
| Stock dividend (1 million shares of $1 par common stock) | (28 | ) | ||
| Property dividend (Garfield Company preferred stock held as a short-term investment) |
(27 | ) | ||
| Sale of treasury stock (cost $62 million) | (8 | ) | ||
| Retained earnings, December 31 | $ | 262 | ||
Required:
For the transactions that affected Larson’s retained earnings,
reconstruct the journal entries that can be used to determine cash
flows to be reported in a statement of cash flows. (If no
entry is required for a transaction/event, select "No journal entry
required" in the first account field. Enter your answers in
millions (i.e., 10,000,000 should be entered as
10).)
Record the closing entry of net income to retained earnings.
Record the payment of the cash dividend.
Record the issuance of the stock dividend.
Record the issuance of the property dividend.
Record the sale of treasury shares.
Solutions
Expert Solution
| Answer | ||
| Account Title | Debit | Credit |
| a | ||
| Income summary | $ 56 | |
| Retained earnings | $ 56 | |
| Net income closed to retained earnings | ||
| b | ||
| Retained earnings | $ 21 | |
| Cash | $ 21 | |
| Cash dividend | ||
| c | ||
| Retained earnings | $ 28 | |
| Common stock | $ 1 | |
| Paid-in capital - in excess of par | $ 27 | |
| Stock dividend | ||
| d | ||
| Retained earnings | $ 27 | |
| Short-term investments | $ 27 | |
| Property dividend | ||
| e | ||
| Cash | $ 54 | |
| Retained earnings | $ 8 | |
| Treasury stock | $ 62 | |
| Sale of treasury shares | ||
ekkarill92 answered 2 years agoRelated Solutions
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Trial Balance
December 31, 2017
Debit
Credit
Purchase Discounts
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Cash
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Accounts Receivable
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Rent Revenue
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Retained Earnings
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Sales Discounts
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Notes Payable
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Selling Expenses
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Trial Balance
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Adjusted Trial Balance
Income Statement
Balance Sheet
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$
5,900
$
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$ 2,800
$ 15,250
$ 15,250
Office Supplies
$
200
$
200
$
200
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2,400
$ 1,800
$
600
$
600
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169,000
$ 169,000
$ 169,500...
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Plus: Income from operations of discontinued Division P (net of $960 income taxes)
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Cost of sales
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144,000
Gross profit
117,000
120,000
Expenses
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Net income
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1.
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$264,000
Cost of sales
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144,000
Gross profit
117,000
120,000
Expenses
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50,700
Net income
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$69,300
Retained earnings (Jan.
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Net income
21,800
69,300
Dividends
(31,400
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(23,900
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Retained earnings (Dec.
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$121,700
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1.
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Debit
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