The Following Selected Transactions Took Place During the Current Year

question 31

Essay

The following selected transactions took place during the current year for a company:
$$\begin{array} { | l | l | } \hline \text { March } 25 & \begin{array} { l } \text { Declared a } \$ 2 \text { per share cash dividend on } 20,000 \text { shares of common Stock } \\\text { outstardiris }\end{array} \\\hline \text { April } 20 & \text { Paid the cash dividends declared on March } 25 . \\\hline \text { Dec. } 31 & \begin{array} { l } \text { Closed the } \$ 52,000 \text { credit balance in Income Summary that reflects net } \\\text { income to Retained Earnings. }\end{array} \\\hline\end{array}$$
(a)Prepare the journal entries for these transactions.
(b)If Retained Earnings had a $75,000 credit balance on January 1,calculate its year-end balance as of December 31.

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Definitions:

Taxes

Mandatory financial charges or levies imposed by a government on individuals or organizations to fund public expenditures.

Transfers

Movements of resources, goods, or funds from one place, person, or entity to another, often without receiving something in return.

Households

Units of individuals living together, making decisions regarding consumption, savings, and investments, playing a key role in the economic system.

Total Income

The sum of all earnings received by an individual or entity, including wages, salaries, and investment returns.