AB 116 WEEK 8 PROBLEM 14-2A

AB 116 WEEK 8 Problem 14 2A
The stockholders equity accounts of Karp Company at January 1 2014 are as follow.
Preferred Stock, 6, 50 par		625,000
Common Stock, $6 par		954,000
Paid-in Capital in Excess of Par—Preferred Stock		189,600
Paid-in Capital in Excess of Par—Common Stock		285,100
Retained Earnings		823,600

There were no dividends in arrears on preferred stock. During 2014, the company had the following transactions and events.
July 1		Declared a $0.70 cash dividend per share on common stock.
Aug. 1		Discovered $20,600 understatement of 2013 depreciation on equipment. (Ignore income taxes.)
Sept. 1		Paid the cash dividend declared on July 1.
Dec. 1		Declared a 15% stock dividend on common stock when the market price of the stock was $17 per share.
15		Declared a 6% cash dividend on preferred stock payable January 15, 2015.
31		Determined that net income for the year was $361,500.
31		Recognized a $195,300 restriction of retained earnings for plant expansion.
 	Your answer is correct. 
 	 
Journalize the transactions, events, and closing entries for net income and dividends. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
 
 
Your answer is correct. 
 
 
Prepare a retained earnings statement for the year. (List items that increase retained earnings first.)