The stockholders equity accounts of Tracey Inc at January 1, 2005 are as follows
Preferred Stock $100 par 7% $5000,000
Current Stock $10 par $900,000
Paid-in capital in Excess of par value
( Preferred Stock ) 100,000
Paid -in capital in Excess of Par value
(Common stock) 900,000
Retained Earnings 500,000
There were no dividends in arrears on preferred stock. During 2005, the company had the following transactions and events:
July 1 Declared a $0.50 cash dividend on common stock.
Aug 1 Discovered a $72,000 overstatement of 2004 depreciation. Ignore income taxes.
Sept 1 Paid the cash dividend declared on July 1.
Dec 1 Declared a 10% stock dividend on common stock when the market value of the stock was $16 per share.
Dec 15 Declared a &% cash dividend on preferred stock payable January 31, 2006
Dec 31 Determined that net income for the year was $380,000.
(a) journalize the transactions and the closing entry for the net income
(b) enter the beginning balances in the accounts and post to the stockholders equity accounts.
(c) Prepare a retained earning statement for the year.
(d) Prepare a stockholders equity section at December 31, 2005.