The stockholders’ equity accounts of Holt Inc., at January 1, 2018, are as follows.

Preferred Stock, $100 par, 7% .............. $600,000

Common Stock, $10 par ...............900,000

Paid-in Capital in Excess of Par—Preferred Stock ....100,000

Paid-in Capital in Excess of Par—Common Stock .....200,000

Retained Earnings .................500,000

There were no dividends in arrears on preferred stock. During 2018, the company had the following transactions and events.

Feb 1 Declared a $0.50 per shares cash dividend on common stock of record on February 15 payable March 1.

Mar 1 Paid the dividend declared in February April 1 Discovered a $65,000 overstatement of 2017 depreciation Ignore income taxes.

May 1 Announced a 3 for 1 stock split Prior to the split the market price per share was 26.

Jul. 1 Declared a 10% stock dividend on common stock when the market price of the stock was $16 per share.

15 Declared a 7% cash dividend on preferred stock payable January 31, 2015.

31 Determined that net income for the year was $350,000.


Instructions

(a) Journalize the transactions and the closing entries for net income and dividends.

(b) Enter the beginning balances in the accounts and post to the stockholders’ equity accounts. (Note: Open additional stockholders’ equity accounts as needed.)

(c) Prepare a retained earnings statement for the year.

(d) Prepare a stockholders’ equity section at December 31, 2014.

Answer rating: 100% (QA)

Complete solution a DORADOS CORPORATION Date Accounts Debit Credit 2118 Retained earnings 40000 Dividend payable 40000 To record cash dividend 050 on ... View the full answer