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

5% 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

Instructions

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

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.

A 16% common stock dividend was declared. The average fair value of the common stock is $16 a share.

Assume that net income for the year was $130,000 (record the closing entry) and the board of directors appropriated $60,000 of retained earnings for plant expansion.