Question
See attached document The post-closing trial balance of Storey Corporation at December 31, 2017, contains the following stockholders? equity accounts. Preferred Stock (15,900 shares issued)
See attached document
The post-closing trial balance of Storey Corporation at December 31, 2017, contains the following stockholders? equity accounts.
Preferred Stock (15,900 shares issued) | $795,000 |
Common Stock (247,000 shares issued) | 2,470,000 |
Paid-in Capital in Excess of Par?Preferred Stock | 247,000 |
Paid-in Capital in Excess of Par?Common Stock | 398,000 |
Common Stock Dividends Distributable | 247,000 |
Retained Earnings | 938,050 |
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; 15,900 shares have been outstanding since January 1, 2016. |
3. | Authorized stock is 20,900 shares of preferred, 494,000 shares of common with a $10 par value. |
4. | The January 1 balance in Retained Earnings was $1,110,000. |
5. | On July 1, 19,400 shares of common stock were issued for cash at $18 per share. |
6. | On September 1, the company discovered an understatement error of $90,500 in computing salaries and wages expense in 2016. The net of tax effect of $63,350 was properly debited directly to Retained Earnings. |
7. | A cash dividend of $247,000 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 $583,000. |
10. | On December 31, 2017, the directors authorized disclosure of a $192,000 restriction of retained earnings for plant expansion. (Use Note X.) |
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