What is balance of retained earnings after year-end closing

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Reference no: EM132519327

Below is the unadjusted trial balance of Johnson Corporation as at 31 December 2019:

Johnson Corporation

Unadjusted Trial Balance

31 December 2019

                                                                       Debit$                            Credit$

Cash                                                               966,525

Office supplies                                                   10,500

Accounts receivable                                            477,750

Prepaid rent                                                           67,725

Equipment                                                               131,250

Accumulated depreciation: Equipment                                                          13,650

Land and building                                                 2,586,150

Accounts payable                                                                                    68,250

Dividend payable                                                                                       57,750

Ordinary share capital (par value $5 per share)                                         3,000,000

Share premium                                                                                       75,000

Treasury shares (acquired at $11 each)                        404,250

Retained earnings                                                                                   378,000

Dividends                                                                   57,750

Service revenues                                                                                 1,755,000

Operating expenses                                                        645,750

TOTAL                                                                        5,347,650               5,347,650

Johnson Corporation closes its books annually on 31 December. It keeps only ONE share premium account to record any related transactions. After preparing the above unadjusted Trial Balance, the accountant of Johnson found that he had omitted the following transactions:

1. 1 December issued 1,000, 5% preference shares of $100 par value at a price of $105 per share.

2. 5 December sold 11,000 of its treasury shares at $ 10 per share.

3. 20 December - sold 15,000 of its treasury shares at $12 per share.

4. On 31 December, the Board of Directors declared to pay a final dividend of $0.2 per ordinary share. All dividends that Johnson owed to its shareholders were paid out on the same day.

Required:

Question (a) Journalize the above transactions. No explanation is required.

Question (b) What is the balance of Retained Earnings after the 2019 year-end closing?

Reference no: EM132519327

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