ACC- Storey Corporation

The post-closing trial balance of Storey Corporation at December 31, 2014, contains the following stockholders’ equity accounts.Preferred Stock (15,400 shares issued) $770,000Common Stock (242,600 shares issued) 2,668,600Paid-in Capital in Excess of Par—Preferred Stock 246,200Paid-in Capital in Excess of Par—Common Stock 396,000Common Stock Dividends Distributable 266,860Retained Earnings 1,034,600A review of the accounting records reveals the following.1. No errors have been made in recording 2014 transactions or in preparing the closing entry for net income.2. Preferred stock is $50 par, 6%, and cumulative; 15,400 shares have been outstanding since January 1, 2013.3. Authorized stock is 20,400 shares of preferred, 485,200 shares of common with a $11 par value.4. The January 1 balance in Retained Earnings was $1,187,600.5. On July 1, 18,500 shares of common stock were issued for cash at $17 per share.6. On September 1, the company discovered an understatement error of $93,600 in computing depreciation in 2013. The net of tax effect of $65,520 was properly debited directly to Retained Earnings.7. A cash dividend of $266,860 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2013.8. On December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $17.9. Net income for the year was $591,800.10. On December 31, 2014, the directors authorized disclosure of a $191,000 restriction of retained earnings for plant expansion. (Use Note X.) Your answer is partially correct. Try again. Reproduce the Retained Earnings account for 2014. (List items in order presented in the problem.)Retained Earnings The stockholders’ equity accounts of Karp Company at January 1, 2014, are as follows.Preferred Stock, 6%, $50 par $555,000Common Stock, $4 par 656,000Paid-in Capital in Excess of Par—Preferred Stock 195,200Paid-in Capital in Excess of Par—Common Stock 305,500Retained Earnings 800,600There were no dividends in arrears on preferred stock. During 2014, the company had the following transactions and events.July 1 Declared a $0.90 cash dividend per share on common stock.Aug. 1 Discovered $21,500 understatement of 2013 depreciation on equipment. (Ignore income taxes.)Sept. 1 Paid the cash dividend declared on July 1.Dec. 1 Declared a 11% stock dividend on common stock when the market price of the stock was $16 per share.15 Declared a 6% cash dividend on preferred stock payable January 15, 2015.31 Determined that net income for the year was $376,900.31 Recognized a $216,500 restriction of retained earnings for plant expansion. Your answer is partially correct. Try again. Journalize the transactions, events, and closing entries for net income and dividends. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)Date Account Titles and Explanation Debit CreditJuly 1 Aug. 1 Sept. 1 Dec. 1 Dec. 15 Dec. 31 (To close net income) (To close cash dividends) (To close stock dividends)