The stockholders equity accounts of Gonzalez, Inc., at January 1, 2017, are as follows.

Preferred Stock, no par, 4,000 shares issued		$400,000
Common Stock, no par, 122,000 shares issued		610,000
Retained Earnings		555,000

During 2017, the company had the following transactions and events.

July		1		Declared a $0.50 cash dividend per share on common stock.
Aug.		1		Discovered a $62,000 overstatement of 2016 depreciation expense. (Ignore income taxes.)
Sept.		1		Paid the cash dividend declared on July 1.
Dec.		1		Declared a 10% stock dividend on common stock when the market price of the stock was $10 per share.
		15		Declared a $6 per share cash dividend on preferred stock, payable January 31, 2018.
		31		Determined that net income for the year was $380,000.

(a) Prepare a retained earnings statement for the year. There are no preferred dividends in arrears. (List items that increase retained earnings first.)

Question 3

(b) Identify the accounting entries that are made for a cash dividend and the date of each entry.

		Debit		Credit
Declaration Date
Record Date
Payment Date