View Policies Current Attempt in Progress The post-closing trial balance of Pharoah Company at December 31, 2022. contains the following stockholders equity accounts. Preferred Stock (15,100 shares issued) $755,000 Common Stock (244,000 shares issued) 3,660,000 Paid-in Capital in Excess of Par-Preferred Stock 247,000 Paid-in Capital in Excess of Par-Common Stock 408,000 Common Stock Dividends Distributable 366,000 Retained Earnings 892,000 A review of the accounting records reveals the following 1 2. a 3 5. 6. No errors have been made in recording 2022 transactions or in preparing the closing entry for net income Preferred stock is $50 par, 6%, and cumulative: 15,100 shares have been outstanding since January 1, 2021. Authorized stock is 20,100 shares of preferred, 488,000 shares of common with a $15 par value The January 1 balance in Retained Earnings was $1,165,000. On July 1, 22,000 shares of common stock were issued for cash at $18 per share. On September 1, the company discovered an understatement error of $90,000 in computing depreciation in 2019, which overstated net income. The net of tax effect of $63,000 was properly debited directly to Retained Earnings A cash dividend of $366,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2021 On December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $18 Net income for the year was $595,200 On December 31, 2022, the directors authorized disclosure of a $193,000 restriction of retained earnings for plant aynancinn i ka Note Y 7 8 9 10 -/40 TII Question 19 of 19 Common Stock Dividends Distributable Retained Earnings 366,000 892,000 1 2 3 5. Areview of the accounting records reveals the following No errors have been made in recording 2022 transactions or in preparing the closing entry for net income Preferred stock is $50 par, 6%, and cumulative; 15,100 shares have been outstanding since January 1, 2021 Authorized stock is 20,100 shares of preferred, 488,000 shares of common with a $15 par value 4 The January 1 balance in Retained Earnings was 51,165,000 On July 1, 22,000 shares of common stock were issued for cash at $18 per share On September 1, the company discovered an understatement error of $90,000 in computing depreciation in 2019, which overstated net income. The net of tax effect of $63.000 was properly debited directly to Retained Earnings. 7 A cash dividend of $366,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2021 On December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $18. 9. Net Income for the year was $595.200 On December 31, 2022, the directors authorized disclosure of a $193,000 restriction of retained earnings for plant expansion (Use Note X 6. 8 10 (a) Reproduce the Retained Earnings account (T-account) for 2022. (List items in order presented in the problem.) Retained Earnings UIT