The ledger of Waite Corporation at December 31, 2025, after the books have been closed, contains the following stockholders' equity accounts.

A review of the accounting records reveals this information:

1. Preferred stock is \(8 \%, \$ 100\) par value, noncumulative. Since January \(1,2024,10,000\) shares have been outstanding; 20,000 shares are authorized.

2. Common stock is no-par with a stated value of \(\$ 5\) per share; 600,000 shares are authorized.

3. The January 1,2025 , balance in Retained Earnings was \(\$ 2,380,000\).

4. On October \(1,60,000\) shares of common stock were sold for cash at \(\$ 9\) per share.

5. A cash dividend of \(\$ 400,000\) was declared and properly allocated to preferred and common stock on November 1. No dividends were paid to preferred stockholders in 2024.

6. Net income for the year was \(\$ 880,000\).

7. On December 31,2025 , the directors authorized disclosure of a \(\$ 160,000\) restriction of retained earnings for plant expansion. (Use Note A.)

Instructions

a. Reproduce the Retained Earnings account (T-account) for the year.

b. Prepare the stockholders' equity section of the balance sheet at December 31 .

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Preferred Stock (10,000 shares issued) Common Stock (300,000 shares issued) Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Stated Value-Common Stock Retained Earnings $1,000,000 1,500,000 200,000 1,600,000 2,860,000