Question: The ledger of Waite Corporation at December 31, 2017, after the books have been closed, contains the following stockholders' equity accounts.
A review of the accounting records reveals this information:
1. Preferred stock is 8%, $100 par value, noncumulative. Since January 1, 2016, 10,000 shares have been outstanding; 20,000 shares are authorized.
2. Common stock is no-par with a stated value of $5 per share; 600,000 shares are authorized.
3. The January 1, 2017, balance in Retained Earnings was $2,380,000.
4. On October 1, 60,000 shares of common stock were sold for cash at $9 per share.
5. A cash dividend of $400,000 was declared and properly allocated to preferred and common stock on November 1. No dividends were paid to preferred stockholders in 2016.
6. Net income for the year was $880,000.
7. On December 31, 2017, the directors authorized disclosure of a $160,000 restriction of retained earnings for plant expansion. (Use Note A.)
Instructions: (a) Reproduce the Retained Earnings account (T-account) for the year.
(b) Prepare the stockholders' equity section of the balance sheet at December 31.