Problem 14-3A

The post-closing trial balance of Storey Corporation at December 31, 2017, contains the following stockholders equity accounts.

Preferred Stock (15,300 shares issued) $765,000 Common Stock (246,000 shares issued) 2,460,000 Paid-in Capital in Excess of ParPreferred Stock 246,000 Paid-in Capital in Excess of ParCommon Stock 394,000 Common Stock Dividends Distributable 246,000 Retained Earnings 971,520

A review of the accounting records reveals the following.

1. No errors have been made in recording 2017 transactions or in preparing the closing entry for net income. 2. Preferred stock is $50 par, 6%, and cumulative; 15,300 shares have been outstanding since January 1, 2016. 3. Authorized stock is 20,300 shares of preferred, 492,000 shares of common with a $10 par value. 4. The January 1 balance in Retained Earnings was $1,160,000. 5. On July 1, 18,500 shares of common stock were issued for cash at $18 per share. 6. On September 1, the company discovered an understatement error of $92,400 in computing salaries and wages expense in 2016. The net of tax effect of $64,680 was properly debited directly to Retained Earnings. 7. A cash dividend of $246,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2016. 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 $18. 9. Net income for the year was $565,000. 10. On December 31, 2017, the directors authorized disclosure of a $201,000 restriction of retained earnings for plant expansion. (Use Note X.)

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Reproduce the Retained Earnings account for 2017. (List items in order presented in the problem.)

Retained Earnings [Entry field with correct answer] Jan. 1 Balance Sept. 1 Prior Per. Adj. Dec. 31 Cash Dividends Dec. 31 Stock Dividends Dec. 31 Net Income Dec. 31 Balance [Entry field with incorrect answer] [Entry field with correct answer] Jan. 1 Balance Sept. 1 Prior Per. Adj. Dec. 31 Cash Dividends Dec. 31 Stock Dividends Dec. 31 Net Income Dec. 31 Balance [Entry field with incorrect answer] [Entry field with correct answer] Jan. 1 Balance Sept. 1 Prior Per. Adj. Dec. 31 Cash Dividends Dec. 31 Stock Dividends Dec. 31 Net Income Dec. 31 Balance [Entry field with incorrect answer] [Entry field with correct answer] Jan. 1 Balance Sept. 1 Prior Per. Adj. Dec. 31 Cash Dividends Dec. 31 Stock Dividends Dec. 31 Net Income Dec. 31 Balance [Entry field with incorrect answer] [Entry field with correct answer] Jan. 1 Balance Sept. 1 Prior Per. Adj. Dec. 31 Cash Dividends Dec. 31 Stock Dividends Dec. 31 Net Income Dec. 31 Balance [Entry field with incorrect answer] [Entry field with correct answer] Jan. 1 Balance Sept. 1 Prior Per. Adj. Dec. 31 Cash Dividends Dec. 31 Stock Dividends Dec. 31 Net Income Dec. 31 Balance [Entry field with correct answer] [Entry field with correct answer] Jan. 1 Balance Sept. 1 Prior Per. Adj. Dec. 31 Cash Dividends Dec. 31 Stock Dividends Dec. 31 Net Income Dec. 31 Balance [Entry field with correct answer] [Entry field with correct answer] Jan. 1 Balance Sept. 1 Prior Per. Adj. Dec. 31 Cash Dividends Dec. 31 Stock Dividends Dec. 31 Net Income Dec. 31 Balance [Entry field with incorrect answer]

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Prepare a retained earnings statement for 2017. (List items that increase retained earnings first.)

STOREY CORPORATION Retained Earnings Statement [Entry field with incorrect answer] December 31, 2017 For the Quarter Ended December 31, 2017 For the Year Ended December 31, 2017 [Entry field with correct answer] Cash Dividends Correction of Overstatement of 2016 Net Income Expenses Net Income / (Loss) Balance, January 1, as reported Balance, January 1, as adjusted Balance, December 31 Revenues Stock Dividends Total Expenses Total Revenues $ [Entry field with incorrect answer] [Entry field with correct answer] Cash Dividends Correction of Overstatement of 2016 Net Income Expenses Net Income / (Loss) Balance, January 1, as reported Balance, January 1, as adjusted Balance, December 31 Revenues Stock Dividends Total Expenses Total Revenues [Entry field with incorrect answer] [Entry field with incorrect answer] Cash Dividends Correction of Overstatement of 2016 Net Income Expenses Net Income / (Loss) Balance, January 1, as reported Balance, January 1, as adjusted Balance, December 31 Revenues Stock Dividends Total Expenses Total Revenues [Entry field with incorrect answer] [Entry field with incorrect answer] Add Less : [Entry field with incorrect answer] Cash Dividends Correction of Overstatement of 2016 Net Income Expenses Net Income / (Loss) Balance, January 1, as reported Balance, January 1, as adjusted Balance, December 31 Revenues Stock Dividends Total Expenses Total Revenues [Entry field with incorrect answer] [Entry field with incorrect answer] [Entry field with incorrect answer] Add Less : [Entry field with incorrect answer] Cash Dividends Correction of Overstatement of 2016 Net Income Expenses Net Income / (Loss) Balance, January 1, as reported Balance, January 1, as adjusted Balance, December 31 Revenues Stock Dividends Total Expenses Total Revenues $ [Entry field with incorrect answer] [Entry field with incorrect answer] Cash Dividends Correction of Overstatement of 2016 Net Income Expenses Net Income / (Loss) Balance, January 1, as reported Balance, January 1, as adjusted Balance, December 31 Revenues Stock Dividends Total Expenses Total Revenues [Entry field with incorrect answer] [Entry field with incorrect answer] [Entry field with incorrect answer] Cash Dividends Correction of Overstatement of 2016 Net Income Expenses Net Income / (Loss) Balance, January 1, as reported Balance, January 1, as adjusted Balance, December 31 Revenues Stock Dividends Total Expenses Total Revenues $ [Entry field with incorrect answer]

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

STOREY CORPORATION. Partial Balance Sheet [Entry field with incorrect answer] For the Year Ended December 31, 2017 December 31, 2017 For the Quarter Ended December 31, 2017 [Entry field with incorrect answer] Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Paid-in Capital Property, Plant and Equipment Stockholders' Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Stockholders' Equity [Entry field with incorrect answer] Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Paid-in Capital Property, Plant and Equipment Stockholders' Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Stockholders' Equity [Entry field with incorrect answer] Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Paid-in Capital Property, Plant and Equipment Stockholders' Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Stockholders' Equity [Entry field with incorrect answer] $ [Entry field with incorrect answer] [Entry field with incorrect answer] $ [Entry field with incorrect answer] [Entry field with incorrect answer] [Entry field with incorrect answer] [Entry field with incorrect answer] [Entry field with incorrect answer] Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Paid-in Capital Property, Plant and Equipment Stockholders' Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Stockholders' Equity [Entry field with incorrect answer] [Entry field with incorrect answer] Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Paid-in Capital Property, Plant and Equipment Stockholders' Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Stockholders' Equity [Entry field with incorrect answer] [Entry field with incorrect answer] [Entry field with incorrect answer] [Entry field with incorrect answer] [Entry field with incorrect answer] Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Paid-in Capital Property, Plant and Equipment Stockholders' Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Stockholders' Equity [Entry field with incorrect answer] [Entry field with incorrect answer] Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Paid-in Capital Property, Plant and Equipment Stockholders' Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Stockholders' Equity [Entry field with incorrect answer] [Entry field with incorrect answer] [Entry field with incorrect answer] [Entry field with incorrect answer] Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Paid-in Capital Property, Plant and Equipment Stockholders' Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Stockholders' Equity $ [Entry field with incorrect answer]

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

Allocation of the cash dividend to preferred stock $ [Entry field with incorrect answer] Allocation of the cash dividend to common stock $ [Entry field with incorrect answer]