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

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ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 27E: Percy Company has 15,000 shares of common stock outstanding during all of 2019. It also has 2...

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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.)