25.00 points Shown below in T-account format are the changes affecting the retai

Question

25.00 points Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2016. At January 1, 2016, the corporation had outstanding 106 million common shares $1 par per share Retained Earnings (S in millions) 108 Beginning balance Retirement of 6 million common shares tor·57 million 97 Net income for the year Declaration and payment of a $0.40 per share cash dividend 40 Declaration and distributionn of a 5% stock dividend 23 136 Ending balance Required 1. From the information provided by the account changes you should be able to recreate the transactions that affected Brenner-Jude's retained earnings during 2016. Prepare the journal entries that Brenner Jude must have recorded during the year for these transactions. (If no entry is required for a particular 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).)

Explanation / Answer

1.

a) Retirement of common shares

Common Stock (6 m X $1) 6

Paid-In Capital - Excess of Par (37-6-6) 25

Retained Earnings(given) 6

Cash 37

b) Net income closed to retained earnings

Income Summary 97

Retained Earnings 97

c) Declaration of a cash dividend

Retained Earnings 40

Cash 40

d) Declaration of a stock dividend

Retained Earnings 23

Common Stock (106-6)X 5% X $1 5

Paid-In Capital - Excess of Par (23-5) 18

2)

Brenner-Jude Corporation

Statement of Retained Earnings

For The Year Ended December 31, 2016

Balance at January 1 108

Net Income for the Year 97 205

Deductions:

Retirement of common stock (6)

Cash dividends of $0.4 pershare (40)

5% stock dividend (23) (69)

Balance at December 31 136

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