On January 1, 2014, Flip Corporation had 560,000 shares of $1 par value common stock issued and outstanding. There was a $3,000,000 balance in the Retained Earnings account at the beginning of the year. During the first quarter of the year, the following transactions occurred:
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Jan. 8
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Issued 40,000 shares of its own common stock for $400,000.
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Jan. 18
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Declared a cash dividend of $1 per share to stockholders of record on Jan. 10.
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Jan. 31
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Paid the $1 cash dividend declared on Jan. 18.
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Feb. 2
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Purchased 3,000 shares of its own common stock for the treasury at $11 per share.
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Feb. 14
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Sold 2,000 shares of the treasury stock purchased on Feb. 2 for $12 per share.
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March 25
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Declared a 2 for 1 stock split on outstanding shares.
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Instructions
Prepare journal entries to record the above transactions.
Part B.
The following information is available for Flip Corporation for the year ended December 31, 2014:
Beginning retained earnings $ 340,000
Cost of goods sold 620,000
Declared cash dividends 50,000
Operating expenses 170,000
Other expenses and losses 40,000
Other revenues and gains 60,000
Sales 1,000,000
Tax rate 30%
Instructions:
1. Prepare a corporate income statement in good form.
2. Prepare a retained earnings statement for the year.