The stockholders’ equity accounts of Port Corporation on January 1, 2011, 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 Value—Preferred Stock ....... 100,000

Paid-in Capital in Excess of Stated Value—Common Stock ..... 1,450,000

Retained Earnings ..................... 1,816,000

Treasury Stock—Common (10,000 shares) ............. 40,000

During 2011, the corporation had the following transactions and events pertaining to its stockholders’ equity.

Feb. 1 Issued 25,000 shares of common stock for $100,000.

Apr. 14 Sold 6,000 shares of treasury stock—common for $33,000.

Sept. 3 Issued 5,000 shares of common stock for a patent valued at $30,000.

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 stock holders’ equity accounts. (Use J5 for the posting reference.)

(c) Prepare a stockholders’ equity section at December 31, 2011, including the disclosure of the preferred dividends in arrears.