The stockholders' equity of Horton Company at December 31, 2016, is shown below.

5% preferred stock, $100 par value, 10,000 shares authorized; 6,000 shares issued and outstanding

$600,000

Common stock, $5 par value, 200,000 shares authorized; 70,000 shares issued and outstanding

350,000

Paid-in capital in excess of par value preferred stock

50,000

Paid-in capital in excess of par value common stock

400,000

Retained earnings

747,000

Total stockholders equity

$2,147,000

The following, transactions, among others, occurred during 2017:

Apr. 1 Declared and issued a 100% stock dividend on all outstanding shares of common stock. The market value of the stock was $14 per share.

Dec. 7 Declared and issued a 4% stock dividend on all outstanding shares of common stock. The market value of the stock was $17 per share.

Dec.20 Declared and paid (1) the annual cash dividend on the preferred stock and (2) a cash dividend of 90 cents per common share.

REQUIRED:
a. Use the template below to indicate the effects of these separate transactions. Show computations
b. Show the computation of retained earnings for 2017 assuming that the company reports 2017 net income of $523,000.

Question a
	Cash	Noncash Assets	Liabilities	Common Stock	APIC	Retained Earnings
Apr. 1 Declared and issued a 100% stock dividend				350,000		(350,000)
Dec. 7 Declared and issued a 4% stock dividend
Dec.20 Declared and paid annual cash dividend on preferred stock
Dec.20 Declared and paid annual cash dividend on common stock
Question b: Computation of Retained earnings
Retained earnings, 12/31/16	747,000
Net Income earned during 2017	523,000
Less: Stock Dividend
Less: Cash Dividend