What is the total balance of RETAINED EARNINGS account as of December 31, 2020 SKIPPY Company reported the following amounts in the equity section of its December 31, 2019Statement of Financial Position:Preference shares 8%, P100 par (10,000 shares authorized, 2,000shares issued)P 200,000Ordinary shares - P5 par (100,000 shares authorized, 20,000shares issued)100,000Share premium125,000Retained earnings450,000Total shareholders' equity875,000During 2020, SKIPPY took part in the following transactions concerning equity:●Paid the annual 2019 #8 per share dividend on preference shares and a #2 per share dividend onordinary shares. These dividends had been declared on December 31,2019.• Purchased 2,700 shares of its own outstanding ordinary shares for $40 per share.Reissued 700 treasury shares for land valued at $30,000.Issued 500 preference shares at $105 per share·Declared a 10% share dividend on the outstanding ordinary shares when the shares are selling for $45per share•Issued the share dividend•Declared the annual 2020 8 per share dividend on preference shares and the #2 per share dividendon ordinary shares. These dividends are payable in 2021.SKIPPY reported net income of $330,000 for the year

The retained earnings are the earnings of the business that are retained for the future purpose of…

Answered: ccount as of December 31, 2

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ccount as of December 31, 2

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What is the total balance of RETAINED EARNINGS account as of December 31, 2020

SKIPPY Company reported the following amounts in the equity section of its December 31, 2019
Statement of Financial Position:
Preference shares 8%, P100 par (10,000 shares authorized, 2,000
shares issued)
P 200,000
Ordinary shares - P5 par (100,000 shares authorized, 20,000
shares issued)
100,000
Share premium
125,000
Retained earnings
450,000
Total shareholders' equity
875,000
During 2020, SKIPPY took part in the following transactions concerning equity:
●
Paid the annual 2019 #8 per share dividend on preference shares and a #2 per share dividend on
ordinary shares. These dividends had been declared on December 31,2019.
• Purchased 2,700 shares of its own outstanding ordinary shares for $40 per share.
Reissued 700 treasury shares for land valued at $30,000.
Issued 500 preference shares at $105 per share
·
Declared a 10% share dividend on the outstanding ordinary shares when the shares are selling for $45
per share
•
Issued the share dividend
•
Declared the annual 2020 8 per share dividend on preference shares and the #2 per share dividend
on ordinary shares. These dividends are payable in 2021.
SKIPPY reported net income of $330,000 for the year

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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