Reference no: EM131812401
A (Part Level Submission)
The post-closing trial balance of Storey Corporation at December 31, 2017, contains the following stockholders' equity accounts:
Preferred Stock (15,400 shares issued) $770,000
Common Stock (243,000 shares issued) 2,430,000
Paid-in Capital in Excess of Par-Preferred Stock 243,000
Paid-in Capital in Excess of Par-Common Stock 400,000
Common Stock Dividends Distributable 243,000
Retained Earnings 1,033,710
A review of the accounting records reveals the following:
1. No errors have been made in recording 2017 transactions or in preparing the closing entry for net income.
2. Preferred stock is $50 par, 6%, and cumulative; 15,400 shares have been outstanding since January 1, 2016.
3. Authorized stock is 20,400 shares of preferred, 486,000 shares of common with a $10 par value.
4. The January 1 balance in Retained Earnings was $1,170,000.
5. On July 1, 18,600 shares of common stock were issued for cash at $16 per share.
6. On September 1, the company discovered an understatement error of $90,700 in computing salaries and wages expense in 2016. The net of tax effect of $63,490 was properly debited directly to Retained Earnings.
7. A cash dividend of $243,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2016.
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 $16.
9. Net income for the year was $559,000. 10. On December 31, 2017, the directors authorized disclosure of a $208,000 restriction of retained earnings for plant expansion. (Use Note X.)
Reproduce the Retained Earnings account for 2017. (List items in order presented in the problem.)