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| Problem 14-2AThe stockholders’ equity accounts of Falk Company at January 1, 2012, are as follows.Preferred Stock, 6%, $50 par $625,000Common Stock, $4 par 636,000Paid-in Capital in Excess of Par—Preferred Stock 187,300Paid-in Capital in Excess of Par—Common Stock 306,900Retained Earnings 798,400There were no dividends in arrears on preferred stock. During 2012, the company had the following transactions and events.July 1 Declared a $0.7 cash dividend on common stock.Aug. 1 Discovered $27,400 understatement of 2011 depreciation on equipment. Ignore income taxes.Sept. 1 Paid the cash dividend declared on July 1.Dec. 1 Declared a 14% stock dividend on common stock when the market value of the stock was $19 per share.15 Declared a 6% cash dividend on preferred stock payable January 15, 2013.31 Determined that net income for the year was $392,700.31 Recognized a $218,500 restriction of retained earnings for plant expansion. |
| (a)Journalize the transactions, events, and closing entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)DateAccount Titles and ExplanationDebitCreditJuly 1[removed][removed][removed] [removed][removed][removed]Aug. 1[removed][removed][removed] [removed][removed][removed]Sept. 1[removed][removed][removed] [removed][removed][removed]Dec. 1[removed][removed][removed] [removed][removed][removed] [removed][removed][removed]Dec. 15[removed][removed][removed] [removed][removed][removed]Dec. 31[removed][removed][removed] [removed][removed][removed] (To close net income) [removed][removed][removed] [removed][removed][removed] (To close cash dividends) [removed][removed][removed] [removed][removed][removed] (To close stock dividends) |
