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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Which of the information provided in the table is irrelevant to the replacement decision?
Bradley Industries is considering replacing a machine that is presently used in its production process.
Which of the following is irrelevant to the replacement decision?
A) the sales price of the new machine
B) the original cost of the old machine
C) the current disposal value of the old machine
D) the annual cash operating costs for both machines
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