Question

Problem 18-4 Statement of retained earnings [LO18-5, 18-7]

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

Problem 18-4 Statement of retained earnings [LO18-5, 18-7]

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	$	7,060,452		$	5,733,552		$	5,904,552
Net income (loss)		3,488,700			2,380,900			(171,000	)
Deductions:
Stock dividend (36,500 shares)		255,500
Common shares retired (128,000 shares)					256,000
Common stock cash dividends		939,950			798,000			0
Balance at end of year	$	9,353,702		$	7,060,452		$	5,733,552

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

Common stock, 1,895,000 shares at $1 par	$	1,895,000
Paid-in capital—excess of par		7,580,000

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.)

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

Common stock, 1,895,000 shares at $1 par	$	1,895,000
Paid-in capital—excess of par		7,580,000

Answer 1