Accounting for Retained Earnings and Share Subscriptions

Flashcards covering Retained Earnings calculations, net income/loss journal entries, dividends, and share subscription transactions based on the lecture's Excel data.

What is the journal entry to record a net income of $150,000$ for the year 2010 based on the Income Summary?

Debit Income Summary $150,000$, Credit Retained Earnings $150,000$

In the 2011 RETAINED EARNINGS statement, what is the calculated ending balance after a beginning balance of $150,000$ and a net loss of $225,000$?

$$-75,000$$

What is the journal entry for dividends declared in 2012 amounting to $200,000$?

Debit Retained Earnings $200,000$, Credit Cash dividends payable $200,000$

Based on the RETAINED EARNINGS statement for 2012, what is the final ending balance after accounting for a beginning balance of $-75,000$, net income of $300,000$, and dividends declared of $200,000$?

$$25,000$$

In the subscription by Mark, how is the Subscriptions Receivabale of $70,000$ calculated?

$$2,000 \times 35$$

What are the credited amounts in the journal entry for Mark's subscription of $2,000$ shares?

Subscribed PS $60,000$ ($2,000 \times 30$) and Share Premium-PS $10,000$

What is the journal entry to record the full payment of the remaining balance for Mark's subscription?

Debit Cash $20,000$ ($70,000 - 50,000$) and Credit Subscriptions Receivabale $20,000$

What is the journal entry for the issuance of shares to Mark on March 25?

Debit Subscribed PS $60,000$, Credit Preference Shares $60,000$

In the alternative scenario on Page 3, how much was the (Dividends Declared) in 2010?

$$150,000$$

In the alternative scenario on Page 3, what is the Retained Earnings ending balance for 2012?

$-125,000$ (beginning balance of $-225,000$ plus Net Income of $300,000$ minus Dividends Declared of $200,000$)