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The shareholders' equity section of Genghis Corporation's balance sheet at January 1, 2020 was as follows. Both preferred shares and common shares have no par value. Genghis Corporation Balance Sheet (partial) As at January 1, 2020 Shareholders' Equity Contributed Capital Preferred Shares, $5 noncumulative, 190,000 authorized, 1,900, $205,000 issued and outstanding Common Shares, unlimited authorized, 27,000 issued and $1,270,000 outstanding $1,270,000 $343,000 $1,613,000 Total Contributed Capital Retained Earnings Total Shareholders' Equity No dividend was declared for common shareholders. However on December 15, 2020, the directors decided to pay dividends to preferred shareholders. The dividend payment date was December 28, 2020. Income before income tax for the year was $190,000. Income tax expense for the year was $38,000. The company uses the retained earnings account to record dividends. Do not enter dollar signs or commas in the input boxes. a) Calculate the amount of dividend to be paid to preferred shareholders. Dividends Payable: $ b) Prepare journal entry for declaration and payment of preferred dividend. Date Account Title and Explanation Debit Cr Dec 15 Dividend payable on preferred shares Dec 28 Recording payment of dividend c) Calculate the ending balance of retained earnings for the year ended December 31, 2020. Do not use the negative sign. Genghis Corporation Statement of Retained Earnings For the Month Ended December 31, 2020 Opening Balance Add: Net Income Less: Cash Dividends Balance - December 31, 2020

The shareholders' equity section of Genghis Corporation's balance sheet at January 1, 2020 was as follows. Both preferred shares and common shares have no par value. Genghis Corporation Balance Sheet (partial) As at January 1, 2020 Shareholders' Equity Contributed Capital Preferred Shares, $5 noncumulative, 190,000 authorized, 1,900, $205,000 issued and outstanding Common Shares, unlimited authorized, 27,000 issued and $1,270,000 outstanding $1,270,000 $343,000 $1,613,000 Total Contributed Capital Retained Earnings Total Shareholders' Equity No dividend was declared for common shareholders. However on December 15, 2020, the directors decided to pay dividends to preferred shareholders. The dividend payment date was December 28, 2020. Income before income tax for the year was $190,000. Income tax expense for the year was $38,000. The company uses the retained earnings account to record dividends. Do not enter dollar signs or commas in the input boxes. a) Calculate the amount of dividend to be paid to preferred shareholders. Dividends Payable: $ b) Prepare journal entry for declaration and payment of preferred dividend. Date Account Title and Explanation Debit Cr Dec 15 Dividend payable on preferred shares Dec 28 Recording payment of dividend c) Calculate the ending balance of retained earnings for the year ended December 31, 2020. Do not use the negative sign. Genghis Corporation Statement of Retained Earnings For the Month Ended December 31, 2020 Opening Balance Add: Net Income Less: Cash Dividends Balance - December 31, 2020

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The shareholders' equity section of Genghis Corporation's balance sheet at January 1, 2020 was as follows. Both preferred shares and common shares have no par value. Genghis Corporation Balance Sheet (partial) As at January 1, 2020 Shareholders' Equity Contributed Capital Preferred Shares, $5 noncumulative, 190,000 authorized, 1,900, issued and outstanding $205,000 Common Shares, unlimited authorized, 27,000 issued and $1,270,000 outstanding Total Contributed Capital $1,270,000 Retained Earnings $343,000 Total Shareholders' Equity $1,613,000 No dividend was declared for common shareholders. However on December 15, 2020, the directors decided to pay dividends to preferred shareholders. The dividend payment date was December 28, 2020. Income before income tax for the year was $190,000. Income tax expense for the year was $38,000. The company uses the retained earnings account to record dividends. Do not enter dollar signs or commas in the input boxes. a) Calculate the amount of dividend to be paid to preferred shareholders. Dividends Payable: $ b) Prepare journal entry for declaration and payment of preferred dividend. Date Account Title and Explanation Debit Cred Dec 15 Dividend payable on preferred shares Dec 28 Recording payment of dividend c) Calculate the ending balance of retained earnings for the year ended December 31, 2020. Do not use the negative sign. Genghis Corporation Statement of Retained Earnings For the Month Ended December 31, 2020 Opening Balance Add: Net Income Less: Cash Dividends Balance - December 31, 2020
Transcribed Image Text:The shareholders' equity section of Genghis Corporation's balance sheet at January 1, 2020 was as follows. Both preferred shares and common shares have no par value. Genghis Corporation Balance Sheet (partial) As at January 1, 2020 Shareholders' Equity Contributed Capital Preferred Shares, $5 noncumulative, 190,000 authorized, 1,900, issued and outstanding $205,000 Common Shares, unlimited authorized, 27,000 issued and $1,270,000 outstanding Total Contributed Capital $1,270,000 Retained Earnings $343,000 Total Shareholders' Equity $1,613,000 No dividend was declared for common shareholders. However on December 15, 2020, the directors decided to pay dividends to preferred shareholders. The dividend payment date was December 28, 2020. Income before income tax for the year was $190,000. Income tax expense for the year was $38,000. The company uses the retained earnings account to record dividends. Do not enter dollar signs or commas in the input boxes. a) Calculate the amount of dividend to be paid to preferred shareholders. Dividends Payable: $ b) Prepare journal entry for declaration and payment of preferred dividend. Date Account Title and Explanation Debit Cred Dec 15 Dividend payable on preferred shares Dec 28 Recording payment of dividend c) Calculate the ending balance of retained earnings for the year ended December 31, 2020. Do not use the negative sign. Genghis Corporation Statement of Retained Earnings For the Month Ended December 31, 2020 Opening Balance Add: Net Income Less: Cash Dividends Balance - December 31, 2020
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