The stockholders equity accounts of Karp Company at January 1, 2017, are as follows. Preferred Stock, 6%, $50 par $550,000 Common Stock, $7 par 1,144,500 Paid-in Capital in Excess of ParPreferred Stock 192,000 Paid-in Capital in Excess of ParCommon Stock 293,500 Retained Earnings 813,500 There were no dividends in arrears on preferred stock. During 2017, the company had the following transactions and events. July 1 Declared a $0.70 cash dividend per share on common stock. Aug. 1 Discovered $29,000 understatement of depreciation expense in 2016. (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 $15 per share. 15 Declared a 6% cash dividend on preferred stock payable January 15, 2018. 31 Determined that net income for the year was $359,000. 31 Recognized a $212,000 restriction of retained earnings for plant expansion. Journalize the transactions, events, and closing entries for net income and dividends. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (To close net income) (To close cash dividends) (To close stock dividends) LINK TO TEXT LINK TO TEXT LINK TO TEXT Enter the beginning balances in the accounts, and post to the stockholders equity accounts. (Note: Open additional stockholders equity accounts as needed.) (Post entries in the order of journal entries presented in the previous part.) Preferred Stock Date Explanation Ref Debit Credit Balance Balance Common Stock Date Explanation Ref Debit Credit Balance Balance Common Stock Dividends Distributable Date Explanation Ref Debit Credit Balance Paid-in Capital in Excess of ParPreferred Stock Date Explanation Ref Debit Credit Balance Balance Paid-in Capital in Excess of ParCommon Stock Date Explanation Ref Debit Credit Balance Balance Retained Earnings Date Explanation Ref Debit Credit Balance Balance Prior period adjustmentdepreciation expense understated Net income Cash dividends Stock dividends Cash Dividends Date Explanation Ref Debit Credit Balance Stock Dividends Date Explanation Ref Debit Credit Balance LINK TO TEXT LINK TO TEXT LINK TO TEXT Prepare a retained earnings statement for the year. (List items that increase retained earnings first.) KARP COMPANY Retained Earnings Statement $ ( ) : : $ $ LINK TO TEXT LINK TO TEXT LINK TO TEXT Prepare a stockholders equity section at December 31, 2017. (Enter account name only and do not provide descriptive information.) KARP COMPANY Balance Sheet (Partial) $ $ $