Question

Comparative statements of retained earnings for Renn-Dever Corporation were reported in its 2018 annual report as follows.

RENN-DEVER CORPORATION Statements of Retained Earnings
For the Years Ended December 31,	2018			2017			2016
Balance at beginning of year	$	7,011,452		$	5,696,552		$	5,864,552
Net income (loss)		3,448,700			2,340,900			(168,000	)
Deductions:
Stock dividend (35,500 shares)		248,500
Common shares retired (124,000 shares)					248,000
Common stock cash dividends		919,950			778,000			0
Balance at end of year	$	9,291,702		$	7,011,452		$	5,696,552

At December 31, 2015, common shares consisted of the following:

Common stock, 1,865,000 shares at $1 par	$	1,865,000
Paid-in capital—excess of par		7,460,000

Required:
Infer from the reports the events and transactions that affected Renn-Dever Corporation’s retained earnings during 2016, 2017, and 2018. Prepare the journal entries that reflect those events and transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Date	General Journal	Debit	Credit
2016	Retained Earnings	168000
	Income Summary		168000
2017	Income Summary	2340900
	Retained Earnings		2340900
	Common Stock	124000
	Paid in Capital-Excess of Par	496000
	Retained Earnings	248000
	Cash		868000
	Retained Earnings	778000
	Cash Dividend Payable		778000
	Cash Dividend Payable	778000
	Cash		778000
2018	Income Summary	3448700
	Retained Earnings		3448700
	Retained Earnings	248500
	Common Stock		35500
	Paid in Capital-Excess of Par		213000
	Retained Earnings	919950
	Cash Dividend Payable		919950
	Cash Dividend Payable	919950
	Cash		919950