The following selected transactions took place during the current year for a company: Feb 25Declared a $2.50 per share cash dividend on 20,000 shares of common stock outstandingMar. 20Paid the cash dividends declared on Feb. 25.Dec 31Closed the $72,000 credit balance in Income Summary that reflects net income to Retained Earnings.(a) Prepare the journal entries for these transactions.(b) If Retained Earnings had a $155,000 credit balance on January 1, calculate its year-end balance as of December 31.
What will be an ideal response?
| (a) | Feb. 25 | Retained Earnings (20,000 shares * $2.5/share) | 50,000 | ? | ? |
| ? | ? | Common Dividend Payable. | ? | 50,000 | ? |
| ? | ? | ? | ? | ? | ? |
| ? | Mar. 20 | Common Dividend Payable | 50,000 | ? | ? |
| ? | ? | Cash | ? | 50,000 | ? |
| ? | ? | ? | ? | ? | ? |
| ? | Dec. 31 | Income Summary | 72,000 | ? | ? |
| ? | ? | Retained Earnings | ? | 72,000 | ? |
| ? | ? | ? | ? | ? | ? |
| (b) | ? | Retained earnings, January 1 | ? | $ 155,000 | ? |
| ? | ? | Plus net income | ? | 72,000 | ? |
| ? | ? | ? | ? | $227,000 | ? |
| ? | ? | Less dividends declared | ? | (50,000) | ? |
| ? | ? | Retained earnings, December 31 | ? | $177,000 | ? |
| ? | ? | ? | ? | ? | ? |
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