Question

Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2016. At January 1, 2016, the corporation had outstanding

108 million common shares, $1 par per share.

Retained Earnings ($ in millions)

103 Beginning balance

Retirement of 8 million common shares for $32 million 6

87 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 34

115 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 2016. Prepare the journal entries that Brenner-Jude must have recorded during the year for these transactions. (If no entry is required for a particular event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

2. Prepare a statement of retained earnings for Brenner-Jude for the year ended 2016. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

Answer 1