Question

The post-closing trial balance of Carla Vista Corporation at December 31, 2020, contains the following stockholders’ equity accounts.

Preferred Stock (14,300 shares issued)		$715,000
Common Stock (253,000 shares issued)		3,795,000
Paid-in Capital in Excess of Par—Preferred Stock		253,000
Paid-in Capital in Excess of Par—Common Stock		396,000
Common Stock Dividends Distributable		379,500
Retained Earnings		777,600

A review of the accounting records reveals the following.

1.		No errors have been made in recording 2020 transactions or in preparing the closing entry for net income.
2.		Preferred stock is $50 par, 6%, and cumulative; 14,300 shares have been outstanding since January 1, 2019.
3.		Authorized stock is 19,300 shares of preferred, 506,000 shares of common with a $15 par value.
4.		The January 1 balance in Retained Earnings was $1,100,000.
5.		On July 1, 22,000 shares of common stock were issued for cash at $18 per share.
6.		On September 1, the company discovered an understatement error of $85,000 in computing salaries and wages expense in 2019. The net of tax effect of $59,500 was properly debited directly to Retained Earnings.
7.		A cash dividend of $379,500 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2019.
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 $572,000.
10.		On December 31, 2020, the directors authorized disclosure of a $191,000 restriction of retained earnings for plant expansion. (Use Note X.)

Prepare a stockholders’ equity section at December 31, 2020

Answer 1

Partial Balance Sheet
Stock Holder Equity
Paid-in capital
Capital stock
6% Preferred stock, $50 par value, cumulative,19,300 shares authorized,14,300 shares issued and  outstanding.	$7,15,000
Common stock, $15 par value,506,000 shares authorized,253,000 shares issued and outstanding	$37,95,000
Common stock dividends Diistributable	$3,79,500	$48,89,500
Additional paid-in capital In excess of par value—
Preferred Stock	$2,53,000
Common Stock	$3,96,000	$6,49,000
Total Paid in Capital		$55,38,500
Retained Earning ( as per Working Note)		$7,77,600
Total Stock Holder Equity		$63,16,100

Retained Earnings
Sept.       1   Prior Per. Adj.	$59,500	Jan.       1   Balance	$11,00,000
Oct.        1   Cash Dividend	$3,79,500	Dec.     31   Net Income	$5,72,000
Dec.      31   Stock Dividend ( 253000*18*10%)	$4,55,400	Dec.     31   Balance	$16,72,000