The stockholders' equity accounts of Motz Inc., at January 1, 2012, are as follows.

There were no dividends in arrears on preferred stock. During 2012, the company had the following transactions and events.

July 1 Declared a $0.50 cash dividend on common stock.

Aug. 1 Discovered a $72,000 overstatement of 2011 depreciation on equipment. 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 value of the stock was $16 per share.

15 Declared a 7% cash dividend on preferred stock payable January 31, 2013.

31 Determined that net income for the year was $350,000.

Instructions (5 Marks)

(a) Journalize the transactions and the closing entry for net income.

(c) make a retained earnings statement for the year.

(d) make a stockholders' equity section at December 31, 2012.