The ledger of Wade Corporation at December 31, 2014, after the books have been c

Question

The ledger of Wade Corporation at December 31, 2014, after the books have been closed, contains the following stockholders' equity accounts. Preferred Stock (14,200 shares issued) $1,434,200 Common Stock (315,300 shares issued) 1,576,500 Paid-in Capital in Excess of Par Value-Preferred Stock 183,100 Paid-in Capital in Excess of Stated Value-Common Stock 1,687,800 Retained Earnings 2,882,340 A review of the accounting records reveals this information: Preferred stock is 7%, $101 par value, noncumulative. Since January 1, 2013, 14,200 shares have been outstanding; 28,400 shares are authorized. Common stock is no-par with a stated value of $5 per share; 630,600 shares are authorized The January 1, 2014, balance in Retained Earnings was $2,418,640. On October 1, 60,200 shares of common stock were sold for cash at $10 per share. A cash dividend of $406,800 was declared and properly allocated to preferred and common stock on November 1. No dividends were paid to preferred stockholders in 2013. Net income for the year was $870,500. On December 31, 2014, the directors authorized disclosure of a $158,000 restriction of retained earnings for plant expansion. (Use Note A.)

Explanation / Answer

Retained earning account

406800

Balance at the year end

(c) Prepare a stockholders’ equity statement
Stockholders' Equity
..

Common stock, $5 stated value, 630,600 shares authorised, 315,300

shares issued and outstanding

Retained earning = 2882340

Less:restricted for plant expansion (158000)

Note A
Of the retained earnings above, $158,000 is restricted for plant expansion and not available for payment of dividends.

Particular Amount Opeaning balance 2,418,640 Nat Income 870,500 Balnce before deductiom 3,289,140 Less : Cash devidend

406800

Balance at the year end

2,882,340

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