On December 15,2016,the Binghampton Corporation established a retained earnings appropriation of $20,000 for future expansion.The balance of the retained earnings account prior to the transaction was $60,000.At December 31,2016,the Corporation had 2,000 shares of $10 par common stock (issued at par)outstanding.The corporate charter indicates 20,000 shares of common stock are authorized and there is no treasury stock.
Required: a)Indicate the effect of the appropriation on the financial statements.
b)Record the appropriation in general journal form.

c)Prepare the Stockholder's Equity section of the Binghampton Corporation's Balance sheet of December 31,2016.

Question

On December 15,2016,the Binghampton Corporation established a retained earnings appropriation of $20,000 for future expansion.The balance of the retained earnings account prior to the transaction was $60,000.At December 31,2016,the Corporation had 2,000 shares of $10 par common stock (issued at par)outstanding.The corporate charter indicates 20,000 shares of common stock are authorized and there is no treasury stock.
Required: a)Indicate the effect of the appropriation on the financial statements.
b)Record the appropriation in general journal form.
  
c)Prepare the Stockholder's Equity section of the Binghampton Corporation's Balance sheet of December 31,2016.

Quizplus · Accepted Answer

The Answer of On December 15,2016,the Binghampton Corporation established a retained earnings appropriation of $20,000 for future expansion.The balance of the retained earnings account prior to the transaction was $60,000.At December 31,2016,the Corporation had 2,000 shares of $10 par common stock (issued at par)outstanding.The corporate charter indicates 20,000 shares of common stock are authorized and there is no treasury stock.
Required: a)Indicate the effect of the appropriation on the financial statements.
b)Record the appropriation in general journal form.
  
c)Prepare the Stockholder's Equity section of the Binghampton Corporation's Balance sheet of December 31,2016.

On December 15,2016,the Binghampton Corporation Established a Retained Earnings Appropriation