The stockholders equity accounts of Neer Corporation on January 1, 2010, were as follows. Preferred Stock (8%, $50 par, cumulative, 10,000 shares authorized) $ 400,000 Common Stock ($1 stated value, 2,000,000 shares authorized) 1,000,000 Paid-in Capital in Excess of Par ValuePreferred Stock 100,000 Paid-in Capital in Excess of Stated ValueCommon Stock 1,450,000 Retained Earnings 1,816,000 Treasury StockCommon (10,000 shares) 50,000

During 2010, the corporation had the following transactions and events pertaining to its stock- holders equity.

Feb. 1 Issued 25,000 shares of common stock for $120,000. Apr. 14 Sold 6,000 shares of treasury stockcommon for $33,000. Sept. 3 Issued 5,000 shares of common stock for a patent valued at $35,000. Nov. 10 Purchased 1,000 shares of common stock for the treasury at a cost of $6,000. Dec. 31 Determined that net income for the year was $452,000. No dividends were declared during the year. Instructions (a) Journalize the transactions and the closing entry for net income.

(b) Enter the beginning balances in the accounts, and post the journal entries to the stockhold- ers equity accounts. (Use J5 for the posting reference.)

(c) Prepare a stockholders equity section at December 31, 2010, including the disclosure of the preferred dividends in arrears.