Problem 14-2A 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 Retained Earnings $580,000 777,500 209,500 302,000 784,500 There were no dividends in arrears on preferred stock. During 2017, the company had the following transactions and events July 1 Declared a $0.70 cash dividend per share on common stock Aug. 1 Discovered $26,000 understatement of depreciation expense in 2016. (Ignore income taxes.) Sept. Paid the cash dividend declared on July1 Dec. 1 Declared a 15% stock dividend on common stock when the market price of the stock was $20 per share 15 31 31 Declared a 6% cash dividend on preferred stock payable January 15, 2018 Determined that net income for the year was $334,000 Recognized a $216,000 restriction of retained earnings for plant expansion ournalize the transactions, events, and closing entries for net income and dividends. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit