Question

Exercise 21-18 (Algo) Spreadsheet entries from statement of retained earnings [LO21-3, 21-4, 21-5, 21-6, 21-7, 21-8]

The statement of retained earnings of Gary Larson Publishers is presented below.

GARY LARSON PUBLISHERS Statement of Retained Earnings For the Year Ended December 31, 2021 ($ in millions)
Retained earnings, January 1		$	210
Add:	Net income		78
Deduct:	Cash dividend		(22	)
	Stock dividend (1 million shares of $1 par common stock)		(13	)
	Property dividend (Garfield Company preferred stock held as a short-term investment)		(10	)
	Sale of treasury stock (cost $50 million)		(8	)
Retained earnings, December 31		$	235

Required:
For the transactions that affected Larson’s retained earnings, reconstruct the journal entries that can be used to determine cash flows to be reported in a statement of cash flows. (If no entry is required for a transaction/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).)

• 1

  Record the closing entry of net income to retained earnings.

• 2

  Record the payment of the cash dividend.

• 3

  Record the issuance of the stock dividend.

• 4

  Record the issuance of the property dividend.

• 5

  Record the sale of treasury shares.

Answer 1