Before preparing financial statements for the current year, the chief accountant for Patel Ltd. discovered the following errors in the accounts:

1. Patel has 20,000, $4 noncumulative preferred shares issued. It paid the preferred shareholders the quarterly dividend, and recorded it as a debit to Dividends Expense and a credit to Cash.

2. A 5% stock dividend (1,000 shares) was declared on the common shares when the fair value per share was $12. To record the declaration, Retained Earnings was debited and Dividends Payable was credited. The shares have not been issued yet.

3. The company declared a 2-for-1 stock split on its 20,000, $4 noncumulative preferred shares. The average cost of the preferred shares before the split was $70. The split was recorded as a debit to Retained Earnings of $1.4 million and a credit to Preferred Shares of $1.4 million.

4. After the stock split described in (3) above, the declaration of the quarterly dividend was recorded as a debit to Cash Dividends—Preferred for $40,000 and a credit to Dividends Payable for $40,000.

Instructions

Prepare any correcting entries that are needed?