Analyzing and Identifying Financial Statement Effects of Dividends The stockholders' equity of Kinney Company at December 31, 2015, is shown below: 5% preferred stock, $100 par value, 10,000 shares authorized; 5,000 shares issued and outstanding $500,000 Common stock, $6 par value, 200,000 shares authorized; 40,000 shares issued and outstanding 240,000 Paid-in capital in excess of par value-preferred stock 50,000 Paid-in capital in excess of par value-common stock 320,000 Retained earnings 634,000 Total stockholders' equity $1,744,000 The following transactions, among others, occurred during 2016. Apr. 1 Declared and issued a 100% stock dividend on all outstanding shares of common stock. The market value of the stock was $12 per share. Dec. 7 Declared and issued a 3% stock dividend on all outstanding shares of common stock. The market value of the stock was $15 per share. Dec. 20 Declared and paid (1) the annual cash dividend on the preferred stock and (2) a cash dividend of 80 cents per common share. Income Statement a. Using the financial statement effects template, illustrate the effects of these transactions. Use negative signs with answers when appropriate. When applicable, enter total amount for contributed capital. Balance Sheet Noncash Contrib. Earned Contra Transaction Cash Asset + Asset Liabilities Capital Capital -Equity Declared and paid 100% stock dividend. 0 = 0 + 0 + 0 0 Declared and paid 3% stock dividend 0 = 0 Declared and issued a cash dividend 0 + 0 = 0 + 0 + 0 0 = + + Revenues Expenses = Net Income 0 = 0 0 + 0 0 + 0 + 0 + 0 0 0 = 0 0 0 = 0 b. Prepare the journal entries for these transactions. General Journal Description A Debit Credit 4/1 0 0 0 0 12/7 A 0 0 Common stock 0 0 0 0 12/20 0 0 A 0 0 c. Post the journal entries from b to the related T-accounts. Cash Common Stock Additional Paid in Capital 0 0 0 0 0 0 0 0 Retained Earnings 0 0 0 0 0 0 d. Prepare a 2016 retained earnings reconciliation assuming that the company reports 2016 net income of $249,000. Do not use negative signs with any of your answers. Kinney Company Statement of Retained Earnings For the Year Ended December 31, 2016 Retained earnings, December 31, 2015 Add: 0 $ 0 0 Less: Cash dividends declared $ 0 Stock dividends declared 0 O Retained earnings, December 31, 2016 $ O 0