Available under Creative Commons-NonCommercial-ShareAlike 4.0 International License.
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:
- Record the restriction in journal entry form.
- Show the shareholders’ equity section of the balance sheet and appropriate note disclosure at December 31, 2016.
- Record the construction of the building when completed on June 30, 2017 for a cost of $90,000, paid in cash.
- Record the journal entry to record the lifting of the restriction on July 31, 2017.
- 1626 reads
