Question
The post-closing trial balance of Blossom Corporation at December 31, 2022, contains the following stockholders equity accounts. Preferred Stock (14,000 shares issued) $700,000 Common Stock
The post-closing trial balance of Blossom Corporation at December 31, 2022, contains the following stockholders equity accounts.
Preferred Stock (14,000 shares issued) | $700,000 | |
Common Stock (240,000 shares issued) | 2,400,000 | |
Paid-in Capital in Excess of ParPreferred Stock | 240,000 | |
Paid-in Capital in Excess of ParCommon Stock | 380,000 | |
Common Stock Dividends Distributable | 240,000 | |
Retained Earnings | 966,500 |
A review of the accounting records reveals the following.
1. | No errors have been made in recording 2022 transactions or in preparing the closing entry for net income. | |
2. | Preferred stock is $50 par, 6%, and cumulative; 14,000 shares have been outstanding since January 1, 2021. | |
3. | Authorized stock is 19,000 shares of preferred, 480,000 shares of common with a $10 par value. | |
4. | The January 1 balance in Retained Earnings was $1,100,000. | |
5. | On July 1, 18,000 shares of common stock were issued for cash at $16 per share. | |
6. | On September 1, the company discovered an understatement error of $85,000 in computing salaries and wages expense in 2021. The net of tax effect of $59,500 was properly debited directly to Retained Earnings. | |
7. | A cash dividend of $240,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2021. | |
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 $16. | |
9. | Net income for the year was $550,000. | |
10. | On December 31, 2022, the directors authorized disclosure of a $190,000 restriction of retained earnings for plant expansion. (Use Note X.) |
Reproduce the Retained Earnings account for 2022. (List items in order presented in the problem.)
Retained Earnings | |||
---|---|---|---|
choose a transaction date Jan. 1 BalanceSept. 1 Prior Per. Adj.Dec. 31 Cash DividendsDec. 31 Stock DividendsDec. 31 Net IncomeDec. 31 Balance | enter a debit amount | choose a transaction date Jan. 1 BalanceSept. 1 Prior Per. Adj.Dec. 31 Cash DividendsDec. 31 Stock DividendsDec. 31 Net IncomeDec. 31 Balance | enter a credit amount |
choose a transaction date Jan. 1 BalanceSept. 1 Prior Per. Adj.Dec. 31 Cash DividendsDec. 31 Stock DividendsDec. 31 Net IncomeDec. 31 Balance | enter a debit amount | choose a transaction date Jan. 1 BalanceSept. 1 Prior Per. Adj.Dec. 31 Cash DividendsDec. 31 Stock DividendsDec. 31 Net IncomeDec. 31 Balance | enter a credit amount |
choose a transaction date Jan. 1 BalanceSept. 1 Prior Per. Adj.Dec. 31 Cash DividendsDec. 31 Stock DividendsDec. 31 Net IncomeDec. 31 Balance | enter a debit amount | choose a transaction date Jan. 1 BalanceSept. 1 Prior Per. Adj.Dec. 31 Cash DividendsDec. 31 Stock DividendsDec. 31 Net IncomeDec. 31 Balance | enter a credit amount |
choose the end date of the accounting period Jan. 1 BalanceSept. 1 Prior Per. Adj.Dec. 31 Cash DividendsDec. 31 Stock DividendsDec. 31 Net IncomeDec. 31 Balance | enter a debit balance | choose the end date of the accounting period Jan. 1 BalanceSept. 1 Prior Per. Adj.Dec. 31 Cash DividendsDec. 31 Stock DividendsDec. 31 Net IncomeDec. 31 Balance | enter a credit balance
|
Compute the allocation of the cash dividend to preferred and common stock.
Allocation of the cash dividend to preferred stock | $enter a dollar amount | |
---|---|---|
Allocation of the cash dividend to common stock | $enter a dollar amount |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started