P14-2A The stockholders' equity accounts of Karp Company at January 1, 2017, are as follows. Preferred Stock, 6%, $50 par $600,000 Common Stock, $5 par 800,000 Paid-in Capital in Excess of Par-Preferred Stock 200,000 Paid-in Capital in Excess of ParCommon Stock 300,000 Retained Earnings 800,000 There were no dividends in arrears on preferred stock. During 2017, the company had the following transactions and events. July 1 Declared a $0.60 cash dividend per share on common stock. Aug. 1 Discovered $25,000 understatement of depreciation expense in 2016. (Ignore income taxes.) Sept. 1 Paid the cash dividend declared on July 1. Dec. 1 Declared a 15% stock dividend on common stock when the market price of the stock was $18 per share. 15 Declared a 6% cash dividend on preferred stock payable January 15, 2018. 31 Determined that net income for the year was $355,000. 31 Recognized a $200,000 restriction of retained earnings for plant expansion. 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 accounts. (Note: Open additional stockholders' equity accounts as needed.) (c) Prepare a retained earnings statement for the year. (d) Prepare a stockholders' equity section at December 31, 2017