Foley Corporation has the following capital structure at the beginning of the year:

4% Preferred stock, $50 par value, 20,000 shares authorized,

6,000 shares issued and outstanding $ 300,000

Common stock, $10 par value, 60,000 shares authorized,

40,000 shares issued and outstanding 400,000

Paid-in capital in excess of par 110,000

Total paid-in capital 810,000

Retained earnings 440,000

Total stockholders' equity $1,250,000

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Instructions

(a) Record the following transactions which occurred consecutively (show all calculations).

1. A total cash dividend of $90,000 was declared and payable to stockholders of record. Record dividends payable on common and preferred stock in separate accounts.

2. A 15% common stock dividend was declared. The average fair value of the common stock is $22 a share.

3. Assume that net income for the year was $140,000 (record the closing entry) and the board of directors appropriated $70,000 of retained earnings for plant expansion.

(b) Construct the stockholders' equity section incorporating all the above information.