Question

Problem 14-02A a-c The post-closing trial balance of Storey Corporation at December 31, 2020, contains the Preferred Stock (15,000 shares Issued) Common Stock (250,000 shares issued) Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Par-Common Stock Common Stock Dividends Distributable Retained Earnings following stockholders equity accounts $750,000 2,500,000 250,000 400,000 250,000 1,042,000 A review of the accounting records reveals the following 1. 2. No errors have been mode in recording 2020 transactions or in preparing the closing entry for net income Preferred stock is $50 par,6%, and curmulative; 15,000 shares have been outstanding since lanuary 1, 2019 Authorized stock is 20,000 shares of preferred, 500,000 shares of common with a $10 par value. The January 1 balance in Retained Earnings was $1,170,000 4. On July 1, 20,000 shares of common stock were issued for cash at $16 per share 6. On September 1, the company discovered an understatement error of $00,000 in computing salaries and wages expense in 2019. T e net of tax offect of s63,000 wau properly debited directly to Retoined Carnings 7 A cash dividend of $250,000 was declared and properly alocated to preferred and common stock on O tober 1 No viends were paid to preferred stockt s on December 31, a 10% common stock dividend was declared out of retained earnings on comenon stock when the market pric" per share was s 16, 9 Net income for the year was $585,000 10. On December 31, 2020, the directors outhorized disclosure of a $200,000 restriction ofl retained earnings for plant exparslon. (Use Note X.) t rs in 2019 - Reproduce the Retained Earnings account for 2020. (List items in order presented in the problem.)

Answer 1

Reproduce the Retained Earnings Account for 2020

Date	Particular	Amount	Date	Particular	Amount
Sept. 1	Prior Period Adjustment	$63,000	Jan. 1	Opening Balance	$1,170,000
Oct. 1	Cash Dividend	$250,000	Dec. 31	Net income	$585,000
Dec. 31	Stock Dividend	$400,000
			Dec. 31	Closing Balance	$1,042,000