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Timber ridge corporation was organized on january 1 2013

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Reference no: EM13481427

The following information is available for Grey Goose Inc.:

Beginning retained earnings                                             $600,000

Cash dividends declared                                                      60,000

Net income for 2014                                                           120,000

Stock dividend declared                                                       15,000

Understatement of last year's depreciation expense           30,000

Instructions

Based on the preceding information, prepare a retained earnings statement for 2014 in the box below.

GREY GOOSE INC.

Retained Earnings Statement

For the Year Ended December 31, 2014

              
                             
  

PROBLEM

Timber Ridge Corporation was organized on January 1, 2013. During its first year, the corporation issued 40,000 shares of $5 par value preferred stock and 400,000 shares of $1 par value common stock. At December 31, the company declared the following cash dividends:

                        2013                            $  8,000

                        2014                            $30,000

                        2015                            $70,000

Instructions

(a)   Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 5% and not cumulative.

(b)   Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and cumulative.

(c)   Journalize the declaration of the cash dividend at December 31, 2015 using the assumption of part (b).

(a)                              Preferred               Common                  Total   

         2013                                                                                           

         2014                                                                                           

         2015

(b)                              Preferred               Common                  Total   

         2013                                                          

         2014                                                             

         2015       

(c)                                                

  

Date

  		   

Account

  		   

Debit

  		   

Credit

  
                          
                          
                          
                          
                       

Reference no: EM13481427

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