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PROBLEM 2

The following information isavailable for Grey Goose Inc.:

Beginning retainedearnings $600,000

Cash dividendsdeclared 60,000

Net income for2014 120,000

Stock dividenddeclared 15,000

Understatement of lastyear's depreciationexpense 30,000

Instructions

Based on the precedinginformation, prepare a retained earnings statement for 2014 in thebox below.

GREYGOOSE INC.

RetainedEarnings Statement

For theYear Ended December 31, 2014


PROBLEM 3

Timber Ridge Corporationwas organized on January 1, 2013. During its first year, thecorporation issued 40,000 shares of $5 par value preferred stockand 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) Showthe allocation of dividends to each class of stock, assuming thepreferred stock dividend is 5% and not cumulative.

(b) Showthe allocation of dividends to each class of stock, assuming thepreferred stock dividend is 6% and cumulative.

(c) Journalize the declaration of the cashdividend 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

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Hubert Koch
Hubert KochLv2
28 Sep 2019

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