Comparative statements of retained earnings for Renn-Dever Corporation were reported in its 2021 annual report as follows. RENN-DEVER CORPORATIONStatements of Retained Earnings

For the Years Ended December 31 2021 2020 2019
Balance at beginning of year $6,962,452 $5,659,552 $5,824,552
Net income (loss) 3,408,700 2,300,900 (165,000 )
Deductions:
Stock dividend (34,500 shares) 241,500
Common shares retired (120,000 shares) 240,000
Common stock cash dividends 899,950 758,000 0
Balance at end of year $9,229,702 $6,962,452 $5,659,552

At December 31, 2013, common shares consisted of the following:

Common stock, 1,855,000 shares at $1 par $1,855,00
Paid-in capital—excess of par 7,420,000

Required:
Infer from the reports the events and transactions that affected Renn-Dever Corporation's retained earnings during 2014, 2015, and 2016. Prepare the journal entries that reflect those events and transactions.

Renn-Dever Corporation

a. The events and transactions that affected Renn-Dever Corporation's retained earnings during 2019, 2020, and 2021 include:

2019:

Net Loss from the Income Statement of $165,000 reduced the retained earnings balance.

2020:

Net Income from the Income Statement of $2,300,900 increased the retained earnings balance.

Some Common Stock held in Treasury Stock were retired permanently to the tune of $240,000.  This reduced the balance of the retained earnings.

Declaration and payment of cash dividend of $758,000 reduced the retained earnings balance.

2021:

There was a net income of $3,408,700 from the income statement which increased the retained earnings balance.

The Company declared stock dividends of $241,500  and cash dividends of $899,950, which together reduced the retained earnings balance.

b. 2019:

Debit Retained Earnings $165,000

Credit Income Summary $165,000

To record the net loss transferred to Retained Earnings.

2020:

Debit Income Summary $2,300,900

Credit Retained Earnings $2,300,900

To record the net income transferred to Retained Earnings.

Debit Retained Earnings $240,000

Credit Treasury Stock $240,000

To record the common stock retired.

Debit Retained Earnings $758,000

Credit Dividends $758,000

To record the cash dividends to stockholders.

2021:

Debit Income Summary $3,408,700

Credit Retained Earnings $3,408,700

To record the transfer of net income to retained earnings.

Debit Retained Earnings $241,500

Credit Stock Dividends $241,500

To record the stock dividends (34,500 shares) to stockholders.

Debit Retained Earnings $899,950

Credit Cash Dividends $899,950

To record the cash dividends to stockholders.

Explanation:

a) Data and Calculations:

RENN-DEVER CORPORATION

Statements of Retained Earnings  

For the Years Ended December 31  2021             2020           2019

Balance at beginning of year   $6,962,452  $5,659,552  $5,824,552

Net income (loss)                         3,408,700    2,300,900       (165,000)

Deductions:

Stock dividend  (34,500 shares)   241,500

Common shares retired (120,000 shares)        240,000

Common stock cash dividends   899,950        758,000           0

Balance at end of year            $9,229,702  $6,962,452    $5,659,552

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23