Response to the following problem:
Acme Corporation has $100,000 of common shares outstanding and $200,000 of retained earnings at December 31, 2016. The board of directors passes a resolution at that date to restrict $80,000 of retained earnings for a plant expansion.
Required:
1. Record the restriction in journal entry form.
2. Show the shareholders' equity section of the balance sheet and appropriate note disclosure at December 31, 2016.
3. Record the construction of the building when completed on June 30, 2017 for a cost of $90,000, paid in cash.
4. Record the journal entry to record the lifting of the restriction on July 31, 2017.