Problem 14 02A a c The post closing trial balance of Crane Corporation at December 31, 2020, contains the following stockholders equity accounts Preferred Stock (14,500 shares issued) $725,000 Common Stock (255,000 shares issued) 3,825,000 Paid in Capital in Excess of ParPreferred Stock 255,000 Paid in Capital in Excess of ParCommon Stock 413,000 Common Stock Dividends Distributable 382,500 Retained Earnings 890,400 A review of the accounting records reveals the following 1 No errors have been made in recording 2020 transactions or in preparing the closing entry for net income 2 Preferred stock is $50 par, 6 , and cumulative 14,500 shares have been outstanding since January 1, 2019 3 Authorized stock is 19,500 shares of preferred, 510,000 shares of common with a $15 par value 4 The January 1 balance in Retained Earnings was $1,170,000 5 On July 1, 18,700 shares of common stock were issued for cash at $16 per share 6 On September 1, the company discovered an understatement error of $93,000 in computing salaries and wages expense in 2019 The net of tax effect of $65,100 was properly debited directly to Retained Earnings 7 A cash dividend of $382,500 was declared and properly allocated to preferred and common stock on October 1 No dividends were paid to preferred stockholders in 2019 8 On December 31, a 10 common stock dividend was declared out of retained earnings on common stock when the market price per share was $16 9 Net income for the year was $576,000 10 On December 31, 2020, the directors authorized disclosure of a $194,000 restriction of retained earnings for plant expansion (Use Note X ) Allocation of the cash dividend to preferred stock $ 87,000 Allocation of the cash dividend to common stock $ Preferred Stock 725,000 TA Common Stock 3,825,000 Common Stock Dividends Distributable 255,000 X 4,080,000 Total Capital Stock 4,805,000 Additional Paid in Capital Paid in Capital in Excess of Par Preferred Stock 255,000 Paid in Capital in Excess of Par Common Stock 413,000 Total Additional Paid in Capital 668,000 Total Paid in Capital 5,473,000 Retained Earnings 890,400 Total Stockholders' Equity 6,363,400 $

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Problem 14-02A a-c The post-closing trial balance of Crane Corporation at December 31, 2020, contains the following stockholders equity accounts. Preferred Stock (14,500 shares issued)

Problem 14-02A a-c

The post-closing trial balance of Crane Corporation at December 31, 2020, contains the following stockholders equity accounts.

Preferred Stock (14,500 shares issued)		$725,000
Common Stock (255,000 shares issued)		3,825,000
Paid-in Capital in Excess of ParPreferred Stock		255,000
Paid-in Capital in Excess of ParCommon Stock		413,000
Common Stock Dividends Distributable		382,500
Retained Earnings		890,400

A review of the accounting records reveals the following.

1.		No errors have been made in recording 2020 transactions or in preparing the closing entry for net income.
2.		Preferred stock is $50 par, 6%, and cumulative; 14,500 shares have been outstanding since January 1, 2019.
3.		Authorized stock is 19,500 shares of preferred, 510,000 shares of common with a $15 par value.
4.		The January 1 balance in Retained Earnings was $1,170,000.
5.		On July 1, 18,700 shares of common stock were issued for cash at $16 per share.
6.		On September 1, the company discovered an understatement error of $93,000 in computing salaries and wages expense in 2019. The net of tax effect of $65,100 was properly debited directly to Retained Earnings.
7.		A cash dividend of $382,500 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2019.
8.		On December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $16.
9.		Net income for the year was $576,000.
10.		On December 31, 2020, the directors authorized disclosure of a $194,000 restriction of retained earnings for plant expansion. (Use Note X.)

image text in transcribed

Allocation of the cash dividend to preferred stock

87,000

Allocation of the cash dividend to common stock

??????

Preferred Stock 725,000 TA Common Stock 3,825,000 Common Stock Dividends Distributable 255,000 X 4,080,000 Total Capital Stock 4,805,000 Additional Paid-in Capital Paid-in Capital in Excess of Par-Preferred Stock 255,000 Paid-in Capital in Excess of Par-Common Stock 413,000 Total Additional Paid-in Capital 668,000 Total Paid-in Capital 5,473,000 Retained Earnings 890,400 Total Stockholders' Equity 6,363,400 $