15-15

Question 1

What Income goes in Retained Earnings

Answer 1

Net income, not comprehensive income

Question 2

Comprehensive income - Net Income (the difference between the two)

Answer 2

goes into the AOCI! (after Retained Earnings)

Question 3

Prepare a journal entry to record the cash dividend.

Answer 3

dr. Retained Earnings 140,000
cr. Cash 140,000
(Cash dividend of $0.70 per share on 200,000 shares)

Question 4

Contributed Surplus explained

Answer 4

Contributed surplus is additional surplus coming
from shareholder transactions

Question 5

S/E section includes:

Answer 5

The shareholders’ equity section of a balance
sheet includes Share Capital, Contributed Surplus,
Retained Earnings, and Accumulated Other
Comprehensive Income. A statement of changes in
shareholders’ equity is required under IFRS.