Problem 14-3A

The post -closing trial balance of Storey Corporation at Decembr 3,2014, contains the following stockholders' equity accounts.

Preferred Stock (15,100 shares issued)	$755,000
Common Stock (258,900 shares issued)	$2,847,900
Paid-in Capital in Excess of Par-Preferred Stock	$259,100
Paid-in Capital in Excess of Par- Common Stock	$412,300
Common Stock Dividends Distributable	$284,790
Retained Earnings	$938,890

A review of accounting records reveals the following.

1. No errores have been made in recording 2014 transactions or in preparing the closing entry for net income.

2. Preferred Stock is $50 par, 6%, and cumulative; 15,100 shares have been outstanding since January 1, 2013.

3. Authorize Stock is 20,100 shares of preferred , 517,800 shares of common with a $11 par value.

4. The January 1 balance in Retained Earnings ws $1,156,500.

5. On July 1, 18,900 shares of common stock were issued for cash at $17 per share.

6. On September 1, the company discovered an understatement error of $92,700 in computing depreciation in 2013. The net od atx effect of $64,890 was properly debited directly to Retained Earnings.

7. A cash dividend of $284,790 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2013.

8. On December 31, a 10% common stock dividends was declared out of retained earnings on common stock when the market price per share ws $17.

9. Net income for the year was $572,200.

10. On December 31, 2014, the directors authorized disclosure of a $209,400 restriction of retained earnings for palnt expansion. (Use Note X).

A. Reproduce the Retained Earnings account for 2014.

B. Prepare a retained earnings statement for 2014.

C. Prepare a stockholders' equity section at December 31, 2014.

D. Compute the allocation of the cash dividend to preferred and common stock.