Selected information for the accounts of Row Co. at December 31, 2013, follows: Total income since incorporation$420,000 Total cash dividend declared 130,000 Total value of property dividends declared30,000 Excess of proceeds over cost of treasury stock sold110,000 In its December 31, 2013 financial statements, what amount should Row reports as retained earnings? A. $260,000 B. $290,000 C. $370,000 D. $400,000 Solution Retained Earnings = Total Income - Cash Dividend - Property Dividends = $420,000 - $130,000 - $30,000 = $260,000 (Option-a) (Note :- The excess proceeds from treasury stock will go into additional paid-in capital and not retained earnings).

1. Selected transactions completed by Primo Discount Corporation during the current fiscal year are
as follows:
Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to
the Chart of Accounts for exact wording of account titles.Jan.9Split the common stock 3 for 1
and reduced the par from $75 to $25 per share. After the split, there were 1,200,000 common
shares outstanding.Feb.28Purchased 40,000 shares of the corporation’s own common stock at
$28, recording the stock at cost.May1Declared semiannual dividends of $0.80 on 75,000 shares
of preferred stock and $0.12 on the common stock to stockholders of record on June 1, payable
on July 10.Jul.10Paid the cash dividends.Sep.7Sold 30,000 shares of treasury stock at $34,
receiving cash.Oct.1Declared semiannual dividends of $0.80 on the preferred stock and $0.12
on the common stock (before the stock dividend). In addition, a 2% common stock dividend was
declared on the common stock outstanding. The fair market value of the common stock is
estimated at $36.Dec.1Paid the cash dividends and issued the certificates for the common stock
dividend.
Solution
Date Particulars Debit $ Credit $ 09-Jan $ 75 par share common stock 30,000,000 $ 25
par share common stock 30,000,000 28-Feb Treasury stock 1,120,000 Bank
1,120,000 01-May Retained earnings 204,000 Dividends payable 204,000
10-Jul Dividends payable 204,000 Bank 204,000 07-Sep Cash 1,020,000
Treasury stock 840,000 Paid in capital-Treasury stock 180,000 01-Oct
Retained earnings 204,000 Dividends payable 204,000 01-Oct Retained
earnings 864,000 Dividends payable 864,000 01-Dec Dividends payable
204,000 Bank 204,000 01-Dec Dividends payable 864,000 Common
stock 600,000 Paid in capital 264,000