Homework Answers
2. Showing the details for spencer corporation in the T-account for Retained Earnings:
Retained Earnings A/C
| Dr. | Cr. | ||
| Particulars | ($) | Particulars | ($) |
| To Balance b/d | $50000 | By P&L a/c (net income) | $300000 |
| To preference dividends | $120000 | ||
| To Equity dividends | $50000 | ||
| To balance c/d | $80000 | ||
| $300000 | $300000 | ||
| By balance c/d | $80000 |
Therefore,
Ending balance in Retained Earnings is $80000
(The correct option is b)
Working notes:
Preference dividends:
Total preference share capital = 5000×$100 = $500000
Preference share dividend rate = 8%
That implies,
Preference dividend for an year = $500000×8% = $40000
Since the preference shares are cumulative and dividend has not been paid since 2015, the previous years dividend for the years 2016 and 2017 is to be paid along with the current year(2018) dividend. So, for the year 2018, preference dividend is paid for 3 complete years.
Preference dividend = $40000 × 3 = $120000
Equity dividends:
Equity dividend = $2 per share
No.of shares = 25000 shares
That implies,
Equity Dividends = 25000 shares × $2 = $50000
- Dividends (preference & equity) are paid out of retained earnings. The retained earnings balance got decreased due to the payment of dividends.
_____×_____
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2. Show the following details for Spencer Corporation in the t-account for Retained Earnings: At the...
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Show the following details for Spencer Corporation in the
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please show work
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Show the following details for Spencer Corporation in the
t-account for Retained Earnings:
At the beginning of 2018, Spencer had a $50,000 debit balance
in retained earnings
During 2018 the company earned $300,000 of net income and
closed the amount into retained earnings.
The company wants to pay a $2.00 per share dividend on each of
its 25,000 shares of common stock. How will the dividends affect
retained earnings? Show the effects in the
t-account.
Before the company can pay...
6. Look at the t-account for retained earnings and compute the total dividends that the company must have paid. Enter the amount here: $ Retained Earnings 717,500 beginning balance Dividends ??? 3,970,000 net income 2,595,000 Using your total dividends calculated above, if the company paid $192,000 to preferred shareholders, how much did they pay their common stockholders? $ If the company has 450,000 shares of common stock, how much in dividends did each share of stock receive? Round to the...
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Need help figuring out Retained earnings in part 2 on
the balance sheet.
please show work
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