Problem 14-2A

The stockholders equity accounts of Karp Company at January 1, 2017, are as follows:

Preferred Stock, 6%, $50 par		$640,000
Common Stock, $7 par		1,095,500
Paid-in Capital in Excess of ParPreferred Stock		185,000
Paid-in Capital in Excess of ParCommon Stock		304,500
Retained Earnings		791,000

There were no dividends in arrears on preferred stock. During 2017, the company had the following transactions and events.

July 1		Declared a $0.80 cash dividend per share on common stock.
Aug. 1		Discovered $28,500 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 $20 per share.
15		Declared a 6% cash dividend on preferred stock payable January 15, 2018.
31		Determined that net income for the year was $392,000.
31		Recognized a $203,000 restriction of retained earnings for plant expansion.

LIST OF ACCOUNTS:

Accumulated Depreciation Cash Cash Dividends Common Stock Common Stock Dividends Distributable Dividends Payable Income Summary Income Tax Expense Income Taxes Payable Interest Expense Interest Payable No Entry Operating Expenses Paid-in Capital in Excess of Par-Common Stock Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Stated Value-Common Stock Preferred Stock Retained Earnings Sales Revenue Stock Dividends Treasury Stock

Prepare a retained earnings statement for the year. (List items that increase retained earnings first.)

KARP COMPANY Retained Earnings Statement For the Quarter Ended December 31, 2017For the Year Ended December 31, 2017December 31, 2017
			$
			()
AddLess:
AddLess:
		$
			$

Prepare a stockholders equity section at December 31, 2017. (Enter account name only and do not provide descriptive information.)

KARP COMPANY Balance Sheet (partial) December 31, 2017For the Quarter Ended December 31, 2017For the Year Ended December 31, 2017
					$
			$
					$