The stockholders' equity of Carly Corporation at January 1 follows:

The following transactions, among others, occurred during the year:

June 18 Declared a 70 percent stock dividend on all outstanding shares of common stock. 

The market value of the stock was \(\$ 14\) per share.

July 1 Issued the stock dividend declared on June 18 .

Dec. 20 Declared the annual cash dividend on the preferred stock and a cash dividend of \(\$ 1.80\) per share on the common stock, payable on January 20 to stockholders of record on December 28.

Required

a. Prepare journal entries to record the foregoing transactions.

b. Prepare a statement of retained earnings. The net income for the year is \(\$ 500,000\).

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6 Percent preferred stock, $10 par value, 40,000 shares authorized; 25,000 shares issued and outstanding... 250,000 Common stock, $1 par value, 300,000 shares authorized; 80,000 shares issued and outstanding.... 80,000 Paid-in capital in excess of par value-Common stock 560,000 Retained earnings 830,000 Total Stockholders' Equity.. $1,720,000