12.5/40 = Question 19 of 19 View Policies Show Attempt History Current Attempt in Progress The post closing trial balance of Pharoah Company at December 31, 2022. contains the following stockholders equity accounts, $755,000 3,660,000 247,000 Preferred Stock (15,100 shares issued) Common Stock (244,000 shares issued) Paid in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Par-Common Stock Common Stock Dividends Distributable Retained Earnings 408,000 366,000 892,000 A review of the accounting records reveals the following 1 2 3. 4 S. 6. No errors have been made in recording 2022 transactions or in preparing the closing entry for net income. Preferred stock is $50 par, 6%, and cumulative: 15.100 shares have been outstanding since January 1, 2021. Authorized stock is 20,100 shares of preferred. 488.000 shares of common with a $15 par value. The January 1 balance in Retained Earnings was $1,165,000. On July 1, 22,000 shares of common stock were issued for cash at $18 per share On September 1, the company discovered an understatement error of $90,000 in computing depreciation in 2019, which overstated net income. The net of tax effect of $63,000 was properly debited directly to retained Earnings. A cash dividend of $366,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2021. On December 31. a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $18. Net income for the year was $595,200. On December 31, 2022, the directors authorized disclosure of a $193,000 restriction of retained earnings for plant expansion. (Use Note X) 7. 8. 9 10 Pharoah Company Partial Balance Sheet $ $ e Textbook and Media