accounting-question-help-acct-221
| Problem 14-2A |
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The stockholders’ equity accounts of Falk Company at January 1, 2012, are as follows.
| Preferred Stock, 6%, $50 par |
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$625,000 |
| Common Stock, $4 par |
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636,000 |
| Paid-in Capital in Excess of Par—Preferred Stock |
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187,300 |
| Paid-in Capital in Excess of Par—Common Stock |
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306,900 |
| Retained Earnings |
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798,400 |
There were no dividends in arrears on preferred stock. During 2012, the company had the following transactions and events.
| July 1 |
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Declared a $0.7 cash dividend on common stock. |
| Aug. 1 |
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Discovered $27,400 understatement of 2011 depreciation on equipment. Ignore income taxes. |
| Sept. 1 |
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Paid the cash dividend declared on July 1. |
| Dec. 1 |
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Declared a 14% stock dividend on common stock when the market value of the stock was $19 per share. |
| 15 |
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Declared a 6% cash dividend on preferred stock payable January 15, 2013. |
| 31 |
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Determined that net income for the year was $392,700. |
| 31 |
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Recognized a $218,500 restriction of retained earnings for plant expansion. |
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| (a) |
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Journalize the transactions, events, and closing entry.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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Date
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Account Titles and Explanation
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Debit
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Credit
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July 1
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Aug. 1
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Sept. 1
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Dec. 1
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Dec. 15
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Dec. 31
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(To close net income)
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(To close cash dividends)
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(To close stock dividends)
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