Problem 14-2A The stockholders' equity accounts of Karp Company at January 1, 2017, are as follows. $585,000 Preferred Stock, 6%, $50 par Common Stock, $7 par 1,109,500 Paid-in Capital in Excess of Par-Preferred Stock 202,000 Paid-in Capital in Excess of Par-Common Stock 305,500 Retained Earnings 784,500 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 $21,000 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 $15 per share. 15 Declared a 6% cash dividend on preferred stock payable January 15, 2018. 31 Determined that net income for the year was $309,000. 31 Recognized a $210,000 restriction of retained earnings for plant expansion