Chapter 14 -Corporation: Dividends On-line Homework The stockholders' equity accounts of Karp Company at January 1, 2017, are as follows: Preferred Stock, 6%, $100 par $600,000 Common Stock, 55 par 500,000 Paid-in Capital in Excess of Par-Preferred Stock 190,000 Paid-in Capital in Excess of Par-Common Stock 297,500 Retained Earnings 800,000 Treasury Stock (10,000 shares) 100.000 There were no dividends in arrears on preferred stock. During 2017, the company had the following transactions and events. Declared a $1 cash dividend per share on common stock. July 1 Sept. Paid the cash dividend declared on July 1. Oct 1 Reissued the treasury stock for $100,000 Dec. 1 Declared and issued a 10% stock dividend on common stock when the market price of the stock was $15 per share. 15 Declared a 6% cash dividend on preferred stock payable January 15, 2018 31 Determined that net income for the year was $350,000.Closed income summary. Closed the dividends accounts. (a)Journalize the transactions, events, and closing entries for net income and dividends. accounts. (b)Enter the beginning balances in the accounts, and post to the stockholders' equity (Note: Open additional stockholders' equity accounts as needed.) (c)Prepare a retained earnings statement for the year. It was discovered that 2016 net income was understated by $50,000. A B C D E F G H I Name Section Date Karp Company (a) neral Journa Date Account Titles Debit Credit July 1 Aug. 1 CUAWN 10 Oct. 1 Dec (b) Preferred Stock Date xplanation Jan. 1 Balance Ref. Debit Credit Balance 600,000 Common Stock Date xplanation Jan. 1 Balance Debit Credit Balance 500,000 Date Karp Company (b) (Continued) Common Stock Dividends Distributable Date Explanation Ref Debit Credit Balance Paid-in Capital in Excess of Par - Preferred Stock Date xplanation Jan. 1 Balance Ref. Debit Credit Balance 190,000 Paid-in Capital in Excess of Par - Common Stock Date Kplanation Jan. 1 Balance Rel Credit Balance 297,500 Retained Earnings Date Explanation Ref. Debit Balance Jan. 1 Balance 800,000 Treasury Stock Jan. 1 100,000 Cash Dividends Date xplanation Debit Credit Balanc W NA Stock Dividends Date xplanation Debit Credit Balance 58 Rarp Company Karp Company Retained Earnings Statement For the Year Ended December 31, 2017 I a unawNw caWN