P$11-7$A$.$ Retained Earnings: Transactions and Statement The stockholders' equity of Carly Corporation at January $1$ follows:

L$07,8$

$6\%$ preferred stock, $$10$ par value, $40,000$ shares authorized;

$25,000$ shares issued and outstanding.

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 $.....................................................$

Total Stockholders' Equity $.................................................$

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

June $18$ Declared in Tht 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\mathrm{.}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.$