Reference no: EM131487824
Financial Accounting Assignment
The post-closing trial balance of Storey Corporation at December 31, 2015, contains the following stockholders' equity accounts.
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Preferred Stock (14,900 shares issued)
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$745,000
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Common Stock (242,300 shares issued)
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2,907,600
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Paid-in Capital in Excess of Par-Preferred Stock
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242,800
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Paid-in Capital in Excess of Par-Common Stock
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412,200
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Common Stock Dividends Distributable
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290,760
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Retained Earnings
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947,160
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A review of the accounting records reveals the following.
1. No errors have been made in recording 2015 transactions or in preparing the closing entry for net income.
2. Preferred stock is $50 par, 6%, and cumulative; 14,900 shares have been outstanding since January 1, 2014.
3. Authorized stock is 19,900 shares of preferred, 484,600 shares of common with a $12 par value.
4. The January 1 balance in Retained Earnings was $1,145,100.
5. On July 1, 20,500 shares of common stock were issued for cash at $18 per share.
6. On September 1, the company discovered an understatement error of $89,200 in computing depreciation in 2014, which overstated net income. The net of tax effect of $62,440 was properly debited directly to Retained Earnings.
7. A cash dividend of $290,760 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2014.
8. 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 $591,400.
10. On December 31, 2015, the directors authorized disclosure of a $190,900 restriction of retained earnings for plant expansion. (Use Note X.)
(a) Reproduce the Retained Earnings account for 2015.