Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2021. At January 1, 2021, the corporation had outstanding 107 million common shares, $1 par per share. Retained Earnings ($ in millions) 109Beginning balanceRetirement of 7 million common shares for $38 million2 98Net income for the yearDeclaration and payment of a $0.35 per share cash dividend35 Declaration and distribution of a6% stock dividend25 145Ending balance Required:1. From the information provided by the account changes, you should be able to recreate the transactions that affected Brenner-Jude’s retained earnings during 2021. Prepare the journal entries that Brenner-Jude must have recorded during the year for these transactions. (Hint: In lieu of revenues and expenses, use an account titled “Income summary” to close net income or net loss.)2. Prepare a statement of retained earnings for Brenner-Jude for the year ended 2021.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2021. At January 1, 2021, the corporation had outstanding 107 million common shares, $1 par per share.

Retained Earnings ($ in millions)
		109	Beginning balance
Retirement of 7 million common shares for $38 million	2
		98	Net income for the year
Declaration and payment of a $0.35 per share cash dividend	35
Declaration and distribution of a 6% stock dividend	25
		145	Ending balance

Required:
1. From the information provided by the account changes, you should be able to recreate the transactions that affected Brenner-Jude’s retained earnings during 2021. Prepare the journal entries that Brenner-Jude must have recorded during the year for these transactions. (Hint: In lieu of revenues and expenses, use an account titled “Income summary” to close net income or net loss.)
2. Prepare a statement of retained earnings for Brenner-Jude for the year ended 2021.

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