e https//edugen.w edugen/student/mainfr.un S Problem 14-2A (Part Level Submissio
ID: 2332073 • Letter: E
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e https//edugen.w edugen/student/mainfr.un S Problem 14-2A (Part Level Submission) The stockholders' equity accounts of Karp Company at January 1, 2017, are as follows: Preferred Stock, 6%, $50 par Common Stock, $5 par Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Par-Common Stock Retained Earnings $645,000 820,000 203,000 304,500 816,000 There were no dividends in arrears on preferred stock. During 2017, the company had the following transactions and events. uly1 Declared a so.80 cash dividend per share on common stock. Aug. 1 Discovered $27,000 understatement of depreciation expense in 2016. (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 price of the stock was S18 per share. 15 31 31 Declared a 6% cash dividend on preferred stock payable January 15, 2018. Determined that net income for the year was $383,000. Recognized a $212,000 restriction of retained earnings for plant expansion. (a) Your answer is correct. ournalize the transactions, events, and closing entries for net income and dividends. (Credit account titles are automatical entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the the order presented in the problem.) Pelisy I 2000-2018 1chn Wiley &Sons Ins All Rights Reserved. A Division of Jchn Wiley&Sons Ins (pExplanation / Answer
Preferred Stock Date Explanation Debit Credit Balance 1-Jan Balance 645,000 Common Stock Date Explanation Debit Credit Balance 1-Jan Balance 820,000 Common stock Dividends distributable Date Explanation Debit Credit Balance 1-Dec stock dividend 82,000 82,000 paid in capital in excess of par -Preferred Stock Date Explanation Debit Credit Balance 1-Dec Balance 203,000 paid in capital in excess of par -common Stock Date Explanation Debit Credit Balance 1-Dec Balance 304,500 Retained Earnings Date Explanation Debit Credit Balance 1-Jan Balance 816,000 1-Aug prior period adjustment -dep expense 27,000 789,000 31-Dec net income 383,000 1,172,000 31-Dec cash dividend 169900 1,002,100 31-Dec stock dividends 295,200 706,900 Cash dividends Date Explanation Debit Credit Balance 1-Jul common stock div 131,200 131,200 15-Dec preferred stock div 38,700 169,900 31-Dec retained earnings 169,900 0 Stock dividend Date Explanation Debit Credit Balance 1-Jul stock dividend 295,200 295,200 15-Dec retained earnings 295,200 0
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