Exercise 21-18 Spreadsheet entries from statement of retained earnings [LO21-3,

Question

Exercise 21-18 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, 2016 ($ in millions) Retained earnings, January 1 $ 260 Add: Net income 77 Deduct: Cash dividend (21 ) Stock dividend (1 million shares of $1 par common stock) (24 ) Property dividend (Garfield Company preferred stock held as a short-term investment) (20 ) Sale of treasury stock (cost $48 million) (11 ) Retained earnings, December 31 $ 261 Required: For the transactions that affected Larson’s retained earnings, reconstruct the journal entries for the transactions that affected retained earnings and 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).) References General JournalExercise 21-18 Spreads

Explanation / Answer

No General Journal Debit Credit 1 Income summary 77 Retained Earnings 77 2 Retained Earnings 21 Cash 21 3 Retained Earnings 24 Common Stock 1million shares *1 $ 1 Paid-in capital—Excess of par 23 4 Retained Earnings 20 Short-term investments 20 5 Cash 37 Retained Earnings 11 Treasury stock 48

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