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P21-11A
Retained Earnings Accounts And Statement. On January 1, 20 Glover Company’s retained earnings accounts had the following balances:
Appropriated for acquisition $60,000
Unappropriated retained earnings 9000,000
$960,000
During the year ended December 31, 20, Glover completed the following selected transactions:
Mar. 20 Declared semiannual dividend of $0.80 per share on preferred stock and $0.25 per share on common stock to shareholders of record on April 10, payable on April 15. Currently 10,000 shares of $50 par preferred stock and 1000,000 shares of $5 par common stock are outstanding.
April 15 Paid cash dividends.
June 16 Last year Glover’s board of directors appropriated $180,000 over a three year period for the purchase of land for a future building site. Made this year’s appropriation for $60,000.
Oct.10 Declared semiannual dividend of $0.80 per share on preferred stock and $0.25 per share on common stock to shareholders of record on November 5, payable on November 10.
Nov. 10 Paid the cash dividends
17 Declared a 5% stock dividend to shareholders of record on December 8, distributable on December 15. Market value of the common stock was estimated at $18 per share.
Dec. 15. Issued certificates for common stock dividend.
31. Net income for 20—was $290,000. Closed the income summary account.
31. Closed the cash dividends and stock dividends account.
1. Prepare journal entries for the transactions.
2. Post all entries affecting the appropriated retained earnings accounts to T accounts.
3. Prepare a retained earnings statement for the year ended December 31, 20–.
