Question

TRANSACTION LIST

Comparative statements of retained earnings for Renn-Dever Corporation were reported in its 2018 annual report as follows. RENN-DEVER CORPORATION Statements of Retained Earnings For the Years Ended December 31 2817 S 6,825,452 5,568,552 5,724,552 2818 2816 Balance at beginning of year Net income (loss) Deductions: (156,eee) 3,288,788 2,188,98e 224,8e0 849,958 $ 9,848,282 Stock dividend (32,880 shares) Common shares retired (188,888 shares) Common stock cash dividends 216,808 708,80e 6,825,452 $ 5,568,552 Balance at end of year At December 31, 2015, common shares consisted of the following: s 1,768,880 12,328,880 Common stock, 1,768,880 shares at $1 par Paid-in capital-excess of par Requlrec Infer from the reports the events and transactions that affected Renn-Dever Corporation's retained earnings during 2016, 2017, and 2018. Prepare the journal entries that reflect those events and transactions. (If no entry Is requlred for a transactlon/event, select "No journal entry requlred" In the first account field.) 1Record transfer of net loss to retained earnings 2 Record transfer of net income to retained earnings 3 Record repurchase of shares for retirement. 4 Record declaration of cash dividend 5 Record payment of cash dividend. 6 Record transfer of net income to retained earnings 7 Record issue of stock dividend. 8 Record declaration of cash dividend. nster or net income to retained

Answer 1

Solution:

Renn - Dever
Journal Entries
Year	S.no.	Particulars	Debit	Credit
2016	1	Retained Earnings Dr	$1,56,000
		To Income Summary		$1,56,000
2017	2	Income Summary Dr	$21,80,900
		To Retained Earnings		$21,80,900
	3	Common Stock Dr (108000*$1)	$1,08,000
		Paid in Capital in excess of Par Dr ($12,320,000/1760000*108000)	$7,56,000
		To Cash		$6,48,000
		To Retained Earnings		$2,16,000
	4	Cash Dividend Dr	$7,08,000
		To Dividend payable		$7,08,000
	5	Dividend Payable Dr	$7,08,000
		To Cash		$7,08,000
2018	6	Income Summary Dr	$32,88,700
		To Retained Earnings		$32,88,700
	7	Stock Dividend Dr	$2,24,000
		To Common Stcok (32000*$1)		$32,000
		To Paid in Capital in excess of Par		$1,92,000
	8	Cash Dividend Dr	$8,49,950
		To Dividend payable		$8,49,950
	9	Dividend Payable Dr	$8,49,950
		To Cash		$8,49,950