Chapter 13, Problem P13.51BPGB

To determine

Stock Dividend:

The Stock dividend is the number of shares given as dividend to the shareholders. The Stock dividend is declared first and shares are issued later. There are two journal entries made, one at the time of declaration of stock dividend and another at the time of issuance of shares.

Cash dividend:

The Cash dividend is the amount of dividend paid to shareholders in cash. The Cash dividend is declared first and paid later. There are two journal entries made, one at the time of declaration of dividend and another at the time of payment.

Retained earnings statement:

The Retained earnings statement is prepared to calculate the ending balance of retained earnings that is added to the stockholder’s equity statement. Retained earnings statement adjusts net income and income distributed as the dividend to calculate the ending balance.

Stockholder’s Equity:

Stockholders Equity includes the paid up amount of all stocks (Common as well as preferred) issued and retained earnings balance. It represents the amount owed to the stockholders by the company. Stockholders Equity is the section of balance sheet’s equity part.

1. Journal entries:

To indicate:

The journal entries for the transactions given

To determine

2. Retained earnings statement:

To indicate:

Retained earnings statement for the year ended December 31, 2018

To determine

3. Stockholder’s Equity section of the balance sheet:

To indicate:

Stockholder’s Equity section of the balance sheet for the year ended December 31, 2018