Question

Problem 14-3A

The post-closing trial balance of Storey Corporation at December 31, 2017, contains the following stockholders’ equity accounts.

Preferred Stock (15,300 shares issued) $765,000
Common Stock (246,000 shares issued) 2,460,000
Paid-in Capital in Excess of Par—Preferred Stock 246,000
Paid-in Capital in Excess of Par—Common Stock 394,000
Common Stock Dividends Distributable 246,000
Retained Earnings 971,520

A review of the accounting records reveals the following.

1. No errors have been made in recording 2017 transactions or in preparing the closing entry for net income.
2. Preferred stock is $50 par, 6%, and cumulative; 15,300 shares have been outstanding since January 1, 2016.
3. Authorized stock is 20,300 shares of preferred, 492,000 shares of common with a $10 par value.
4. The January 1 balance in Retained Earnings was $1,160,000.
5. On July 1, 18,500 shares of common stock were issued for cash at $18 per share.
6. On September 1, the company discovered an understatement error of $92,400 in computing salaries and wages expense in 2016. The net of tax effect of $64,680 was properly debited directly to Retained Earnings.
7. A cash dividend of $246,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2016.
8. On December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $18.
9. Net income for the year was $565,000.
10. On December 31, 2017, the directors authorized disclosure of a $201,000 restriction of retained earnings for plant expansion. (Use Note X.)

[Partially correct answer.] Your answer is partially correct. Try again.

Reproduce the Retained Earnings account for 2017. (List items in order presented in the problem.)

Retained Earnings
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Jan. 1 Balance
Sept. 1 Prior Per. Adj.
Dec. 31 Cash Dividends
Dec. 31 Stock Dividends
Dec. 31 Net Income
Dec. 31 Balance
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Jan. 1 Balance
Sept. 1 Prior Per. Adj.
Dec. 31 Cash Dividends
Dec. 31 Stock Dividends
Dec. 31 Net Income
Dec. 31 Balance
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Jan. 1 Balance
Sept. 1 Prior Per. Adj.
Dec. 31 Cash Dividends
Dec. 31 Stock Dividends
Dec. 31 Net Income
Dec. 31 Balance
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Jan. 1 Balance
Sept. 1 Prior Per. Adj.
Dec. 31 Cash Dividends
Dec. 31 Stock Dividends
Dec. 31 Net Income
Dec. 31 Balance
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Jan. 1 Balance
Sept. 1 Prior Per. Adj.
Dec. 31 Cash Dividends
Dec. 31 Stock Dividends
Dec. 31 Net Income
Dec. 31 Balance
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Jan. 1 Balance
Sept. 1 Prior Per. Adj.
Dec. 31 Cash Dividends
Dec. 31 Stock Dividends
Dec. 31 Net Income
Dec. 31 Balance
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Jan. 1 Balance
Sept. 1 Prior Per. Adj.
Dec. 31 Cash Dividends
Dec. 31 Stock Dividends
Dec. 31 Net Income
Dec. 31 Balance
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Jan. 1 Balance
Sept. 1 Prior Per. Adj.
Dec. 31 Cash Dividends
Dec. 31 Stock Dividends
Dec. 31 Net Income
Dec. 31 Balance
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[Partially correct answer.] Your answer is partially correct. Try again.

Prepare a retained earnings statement for 2017. (List items that increase retained earnings first.)

STOREY CORPORATION
Retained Earnings Statement
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December 31, 2017
For the Quarter Ended December 31, 2017
For the Year Ended December 31, 2017
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Cash Dividends
Correction of Overstatement of 2016 Net Income
Expenses
Net Income / (Loss)
Balance, January 1, as reported
Balance, January 1, as adjusted
Balance, December 31
Revenues
Stock Dividends
Total Expenses
Total Revenues
$
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Cash Dividends
Correction of Overstatement of 2016 Net Income
Expenses
Net Income / (Loss)
Balance, January 1, as reported
Balance, January 1, as adjusted
Balance, December 31
Revenues
Stock Dividends
Total Expenses
Total Revenues
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Cash Dividends
Correction of Overstatement of 2016 Net Income
Expenses
Net Income / (Loss)
Balance, January 1, as reported
Balance, January 1, as adjusted
Balance, December 31
Revenues
Stock Dividends
Total Expenses
Total Revenues
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Add
Less
:
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Cash Dividends
Correction of Overstatement of 2016 Net Income
Expenses
Net Income / (Loss)
Balance, January 1, as reported
Balance, January 1, as adjusted
Balance, December 31
Revenues
Stock Dividends
Total Expenses
Total Revenues
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Add
Less
:
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Cash Dividends    
Correction of Overstatement of 2016 Net Income    
Expenses    
Net Income / (Loss)    
Balance, January 1, as reported    
Balance, January 1, as adjusted    
Balance, December 31    
Revenues    
Stock Dividends    
Total Expenses    
Total Revenues    
$
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[Entry field with incorrect answer]
    
Cash Dividends    
Correction of Overstatement of 2016 Net Income    
Expenses    
Net Income / (Loss)    
Balance, January 1, as reported    
Balance, January 1, as adjusted    
Balance, December 31    
Revenues    
Stock Dividends    
Total Expenses    
Total Revenues    
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[Entry field with incorrect answer]
[Entry field with incorrect answer]

Cash Dividends
Correction of Overstatement of 2016 Net Income
Expenses
Net Income / (Loss)
Balance, January 1, as reported
Balance, January 1, as adjusted
Balance, December 31
Revenues
Stock Dividends
Total Expenses
Total Revenues
$
[Entry field with incorrect answer]

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[Incorrect answer.] Your answer is incorrect. Try again.

Prepare a stockholders’ equity section at December 31, 2017. (Enter account name only and do not provide descriptive information.)

STOREY CORPORATION.
Partial Balance Sheet
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For the Year Ended December 31, 2017
December 31, 2017
For the Quarter Ended December 31, 2017
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Additional Paid-in Capital
Capital Stock
Current Assets
Current Liabilities
Intangible Assets
Long-term Investments
Long-term Liabilities
Paid-in Capital
Property, Plant and Equipment
Stockholders' Equity
Total Additional Paid-in Capital
Total Assets
Total Capital Stock
Total Current Assets
Total Current Liabilities
Total Intangible Assets
Total Liabilities
Total Liabilities and Stockholders' Equity
Total Long-term Investments
Total Long-term Liabilities
Total Paid-in Capital
Total Paid-in Capital and Retained Earnings
Total Property, Plant and Equipment
Total Stockholders' Equity
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Additional Paid-in Capital
Capital Stock
Current Assets
Current Liabilities
Intangible Assets
Long-term Investments
Long-term Liabilities
Paid-in Capital
Property, Plant and Equipment
Stockholders' Equity
Total Additional Paid-in Capital
Total Assets
Total Capital Stock
Total Current Assets
Total Current Liabilities
Total Intangible Assets
Total Liabilities
Total Liabilities and Stockholders' Equity
Total Long-term Investments
Total Long-term Liabilities
Total Paid-in Capital
Total Paid-in Capital and Retained Earnings
Total Property, Plant and Equipment
Total Stockholders' Equity
[Entry field with incorrect answer]

Additional Paid-in Capital
Capital Stock
Current Assets
Current Liabilities
Intangible Assets
Long-term Investments
Long-term Liabilities
Paid-in Capital
Property, Plant and Equipment
Stockholders' Equity
Total Additional Paid-in Capital
Total Assets
Total Capital Stock
Total Current Assets
Total Current Liabilities
Total Intangible Assets
Total Liabilities
Total Liabilities and Stockholders' Equity
Total Long-term Investments
Total Long-term Liabilities
Total Paid-in Capital
Total Paid-in Capital and Retained Earnings
Total Property, Plant and Equipment
Total Stockholders' Equity
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$
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$
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[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
    
Additional Paid-in Capital    
Capital Stock    
Current Assets    
Current Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Paid-in Capital    
Property, Plant and Equipment    
Stockholders' Equity    
Total Additional Paid-in Capital    
Total Assets    
Total Capital Stock    
Total Current Assets    
Total Current Liabilities    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Paid-in Capital    
Total Paid-in Capital and Retained Earnings    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
[Entry field with incorrect answer]
[Entry field with incorrect answer]

Additional Paid-in Capital
Capital Stock
Current Assets
Current Liabilities
Intangible Assets
Long-term Investments
Long-term Liabilities
Paid-in Capital
Property, Plant and Equipment
Stockholders' Equity
Total Additional Paid-in Capital
Total Assets
Total Capital Stock
Total Current Assets
Total Current Liabilities
Total Intangible Assets
Total Liabilities
Total Liabilities and Stockholders' Equity
Total Long-term Investments
Total Long-term Liabilities
Total Paid-in Capital
Total Paid-in Capital and Retained Earnings
Total Property, Plant and Equipment
Total Stockholders' Equity
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]

Additional Paid-in Capital
Capital Stock
Current Assets
Current Liabilities
Intangible Assets
Long-term Investments
Long-term Liabilities
Paid-in Capital
Property, Plant and Equipment
Stockholders' Equity
Total Additional Paid-in Capital
Total Assets
Total Capital Stock
Total Current Assets
Total Current Liabilities
Total Intangible Assets
Total Liabilities
Total Liabilities and Stockholders' Equity
Total Long-term Investments
Total Long-term Liabilities
Total Paid-in Capital
Total Paid-in Capital and Retained Earnings
Total Property, Plant and Equipment
Total Stockholders' Equity
[Entry field with incorrect answer]
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Additional Paid-in Capital    
Capital Stock    
Current Assets    
Current Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Paid-in Capital    
Property, Plant and Equipment    
Stockholders' Equity    
Total Additional Paid-in Capital    
Total Assets    
Total Capital Stock    
Total Current Assets    
Total Current Liabilities    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Paid-in Capital    
Total Paid-in Capital and Retained Earnings    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
    
Additional Paid-in Capital    
Capital Stock    
Current Assets    
Current Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Paid-in Capital    
Property, Plant and Equipment    
Stockholders' Equity    
Total Additional Paid-in Capital    
Total Assets    
Total Capital Stock    
Total Current Assets    
Total Current Liabilities    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Paid-in Capital    
Total Paid-in Capital and Retained Earnings    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
$
[Entry field with incorrect answer]

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[Incorrect answer.] Your answer is incorrect. Try again.

Compute the allocation of the cash dividend to preferred and common stock.

Allocation of the cash dividend to preferred stock $
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Allocation of the cash dividend to common stock $
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Answer 1