Reference no: EM131793893

Problem - The stockholders' equity accounts of Hashmi Company at January 1, 2010, are as follows.

Preferred Stock, 6%, $50 par $560,000

Common Stock, $4 par 646,400

Paid-in Capital in Excess of Par Value-Preferred Stock 185,900

Paid-in Capital in Excess of Par Value-Common Stock 308,500

Retained Earnings 822,700

There were no dividends in arrears on preferred stock. During 2010, the company had the following transactions and events.

July 1 Declared a $0.90 cash dividend on common stock.

Aug. 1 Discovered $25,800 understatement of 2009 depreciation. Ignore income taxes.

Sept. 1 Paid the cash dividend declared on July 1.

Dec. 1 Declared a 11% stock dividend on common stock when the market value of the stock was $17 per share.

Dec. 15 Declared a 6% cash dividend on preferred stock payable January 15, 2011.

Dec. 31 Determined that net income for the year was $344,800.

Dec. 31 Recognized a $190,100 restriction of retained earnings for plant expansion

a) Journalize the transactions, events, and closing entries.

b) Enter the beginning balances in the accounts, and post to the stockholders' equity accounts.

c) Complete the retained earnings statement for the year.

d) Prepare a stockholders' equity section at December 31, 2010.