Explanation Appropriation of retained earnings : The restricted use of the retained earnings for funding future business plans like expansion of business activities, meet the payment of debt obligations, purchase of treasury stock , or meet any contingencies, is referred to as appropriation of retained earnings. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts. Journalize the given transactions in the books of Company K . Transaction on March 16: Date Account Titles and Explanation Post Ref. Debit ($) Credit ($) 20-- March 16 Retained Earnings 50,000 Retained Earnings Appropriated for Factory Equipment 50,000 (Record appropriation of retained earnings for factory equipment) Table (1) Description: Retained Earnings is a stockholders’ equity account. Since a portion of retained earnings are appropriated, the retained earnings amount decreased, and a decrease in equity is debited. Retained Earnings Appropriated for Factory Equipment is a stockholders’ equity account. Since a portion of retained earnings are appropriated, the retained earnings appropriated amount increased, and an increase in equity is credited. Transaction on November 5: Date Account Titles and Explanation Post Ref. Debit ($) Credit ($) 20-- November 5 Warehouse 70,000 Cash 70,000 (Record purchase of warehouse for cash) Table (2) Description: Warehouse is an asset account. The amount is increased because warehouse is acquired, and an increase in assets should be debited. Cash is an asset account. Since cash is paid, asset value decreased, and a decrease in asset is credited. Transaction on November 5: Date Account Titles and Explanation Post Ref. Debit ($) Credit ($) 20-- November 5 Retained Earnings Appropriated for Warehouse 70,000 Retained Earnings 70,000 (Record use of appropriated retained earnings) Table (3) Description: Retained Earnings Appropriated for Warehouse is a stockholders’ equity account...

College Accounting, Chapters 1-9 (New in Accounting from Heintz and Parry)

22nd Edition

ISBN: 9781305666184

Author: James A. Heintz, Robert W. Parry

Publisher: Cengage Learning

See similar textbooks

Concept explainers

Reporting Cash Flows

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows fro…

Balance Sheet

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the …

Financial Statements

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It…

Owner's Capital

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expect…

Videos

Question

Chapter 21, Problem 10SPB

To determine

Journalize the given transactions in the books of Company K.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 21, Problem 9SPB

Chapter 21, Problem 11SPB

Students have asked these similar questions

Financial accounting questions

A share just paid a dividend of... Please solve this financial accounting problem

Please provide solution this financial accounting question

Chapter 21 Solutions

College Accounting, Chapters 1-9 (New in Accounting from Heintz and Parry)

Ch. 21 - Income taxes are a unique expense of the corporate...Ch. 21 - Prob. 2TF Ch. 21 - Prob. 3TF Ch. 21 - Prob. 4TF Ch. 21 - Prob. 5TF Ch. 21 - Prob. 1MC Ch. 21 - Prob. 2MC Ch. 21 - Prob. 3MC Ch. 21 - Prob. 4MC Ch. 21 - Prob. 5MC

Ch. 21 - Prob. 1CE Ch. 21 - Prob. 2CE Ch. 21 - Teway Company declared and paid dividends in the...Ch. 21 - Prob. 4CE Ch. 21 - Prob. 5CE Ch. 21 - Prob. 1RQ Ch. 21 - Prob. 2RQ Ch. 21 - Prob. 3RQ Ch. 21 - Prob. 4RQ Ch. 21 - Prob. 5RQ Ch. 21 - Prob. 6RQ Ch. 21 - Prob. 7RQ Ch. 21 - Prob. 8RQ Ch. 21 - Prob. 9RQ Ch. 21 - Prob. 10RQ Ch. 21 - Prob. 11RQ Ch. 21 - CORPORATE INCOME TAX Stanton Company estimates...Ch. 21 - CLOSING INCOME SUMMARY AND DIVIDENDS TO RETAINED...Ch. 21 - Prob. 3SEA Ch. 21 - STOCK DIVIDENDS Kaufman Company currently has...Ch. 21 - STOCK SPLIT Goldstein Company has 100,000 shares...Ch. 21 - Prob. 6SEA Ch. 21 - STATEMENT OF RETAINED EARNINGS McGregor Company...Ch. 21 - Prob. 8SPA Ch. 21 - Prob. 9SPA Ch. 21 - Prob. 10SPA Ch. 21 - Prob. 11SPA Ch. 21 - Prob. 1SEB Ch. 21 - CLOSING INCOME SUMMARY AND DIVIDENDS TO RETAINED...Ch. 21 - COMMON AND PREFERRED CASH DIVIDENDS Ramirez...Ch. 21 - STOCK DIVIDENDS Martinez Company currently has...Ch. 21 - Prob. 5SEB Ch. 21 - Prob. 6SEB Ch. 21 - Prob. 7SEB Ch. 21 - CASH DIVIDENDS AND INCOME TAXES During the year...Ch. 21 - CASH DIVIDENDS, STOCK DIVIDEND, AND STOCK SPLIT...Ch. 21 - Prob. 10SPB Ch. 21 - Prob. 11SPB Ch. 21 - Prob. 1MYW Ch. 21 - Prob. 1EC Ch. 21 - MASTRY PROBLEM On January 1, 20--, Dover Companys...Ch. 21 - CHALLENGE PROBLEM This problem challenges you to...

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Journalize the given transactions in the books of Company K.

Solution Summary: Journal entry is a set of economic events which can be measured in monetary terms.

Concept explainers

Videos

Journalize the given transactions in the books of Company K.

Want to see the full answer?

Chapter 21 Solutions