wileyplus 2 tasks

Project Description:

the stockholders’ equity accounts of karp company at january 1, 2014, are as follows.


preferred stock, 6%, $50 par $640,000
common stock, $5 par 795,000
paid-in capital in excess of par—preferred stock 194,100
paid-in capital in excess of par—common stock 314,200
retained earnings 769,800

there were no dividends in arrears on preferred stock. during 2014, the company had the following transactions and events.


july 1 declared a $0.50 cash dividend per share on common stock.
aug. 1 discovered $25,000 understatement of 2013 depreciation on equipment. (ignore income taxes.)
sept. 1 paid the cash dividend declared on july 1.
dec. 1 declared a 12% stock dividend on common stock when the market price of the stock was $18 per share.
15 declared a 6% cash dividend on preferred stock payable january 15, 2015.
31 determined that net income for the year was $319,800.
31 recognized a $191,500 restriction of retained earnings for plant expansion.


2nd task
problem 14-3a


the post-closing trial balance of storey corporation at december 31, 2014, contains the following stockholders’ equity accounts.


preferred stock (14,600 shares issued) $730,000
common stock (258,900 shares issued) 3,106,800
paid-in capital in excess of par—preferred stock 252,800
paid-in capital in excess of par—common stock 409,600
common stock dividends distributable 310,680
retained earnings 918,310

a review of the accounting records reveals the following.


1. no errors have been made in recording 2014 transactions or in preparing the closing entry for net income.
2. preferred stock is $50 par, 6%, and cumulative; 14,600 shares have been outstanding since january 1, 2013.
3. authorized stock is 19,600 shares of preferred, 517,800 shares of common with a $12 par value.
4. the january 1 balance in retained earnings was $1,147,800.
5. on july 1, 20,600 shares of common stock were issued for cash at $17 per share.
6. on september 1, the company discovered an understatement error of $85,400 in computing depreciation in 2013. the net of tax effect of $59,780 was properly debited directly to retained earnings.
7. a cash dividend of $310,680 was declared and properly allocated to preferred and common stock on october 1. no dividends were paid to preferred stockholders in 2013.
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 $17.
9. net income for the year was $581,100.
10. on december 31, 2014, the directors authorized disclosure of a $198,500 restriction of retained earnings for plant expansion. (use note x.)
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