P14-2

post epsare retained ent and P14-2A The stockholders' equity accounts of Karp Company at January 1, 2017, are as follows. Preferred stock, 6%, $50 par Common Stock. $5 par Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Par-Common Stock $600,000 800,000 200,000 300,000 800,000 Retained Earnings There were no dividends in arrears on preferred stock. During 2017, the company had the following transactions and events. July 1 Declared a $o.60 cash dividend per share on common stock. Discovered $25,000 understatement of depreciation expense in 2016. (Ignore income taxes.) Paid the cash dividend declared on July 1. Declared a 1 5% stock dividend on common stock when the market price of the stock was $18 per share. Declared a 6% cash dividend on preferred stock payable January 15, 2018. Determined that net income for the year was $355,000. Recognized a $200,000 restriction of retained earnings for plant expansion. Aug. 1 Sept. 1 Dec. 1 15 31 31 Instructions (a) Journalize the transactions, events, and closing entries for net income and dividends. (b) Enter the beginning balances in the accounts, and post to the stockholders' equity 566,000 s equity (c) Prepare a retained earnings statement for the year accounts. (Note: Open additional stockholders' equity accounts as needed.) (d) Prepare a stockholders' equity section at December 31, 2017