Question

Problem 14-02Aa-c The post-closing trial balance of Storey Corporation at December 31, 2020, contains the following stockholders' equity accounts. 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 $750,000 2,500,000 250,000 400,000 250,000 1,042,000 A review of the accounting records reveals the following 1. No errors have been made in recording 2020 transactions or in proparing the closing entry for net income. 2. Preferred stock is $50 par, 6%, and curmulative; 15,000 shares have been outstanding since laniery 1,2019. 3. Authorized stock is 20,000 shares of preferred, 500,000 shares of common with a $10 par value 4. The January 1 balance in Retained Earnings was $1,170,000. 5. On July 1, 20,000 shares of common stock were issued for cash at $16 per share 6. on September I, the company discovered an understaterment error of $90,000 m conputing sualaries and wages oxpense in 2019. The set of taox offect of $63,000 was property . A cash dividend of $250,000 was declared and property allocated to preferred and common stock on October 1. No dividends were pold to preferred stockholders in 2019 8 On December 31, n 10% connnon stock dividend was declared out of retained earnings on cornmon stock when the market price per share was si debited diredtly to Retained Earnings 9 Net income for the year was $585,000 10 On December 31, 2020, the directors authorized disclosure of a $200,000 restisction of retained earnings for plant expansion (Use Noto X.) Reproduce the Retained Earnings account for 2020,(List items in order presented in the problem)

Answer 1

RETAINED EARNINGS

Prior Period adjustment	63,000	Beg. Bal	1,170,000
Cash dividend	250,000	Net Income	585,000
Stock Dividend	400,000
		End. Balance	1042,000

STOREY CORPORATION

Retained Earrning Statement

For the year ended Dec 31, 2020

Beginninf Balalnce Jan 31, 2020		1,170,000
Prior period adjustment-salaries and wages		63,000
Balance-jan 1,2020 adjusted		1,107,000
Net income		585,000
Sub total		1,692,000
Cash Dividend	250,000
Stock Divided	400,000
Total Dividend		650,000
Ending Balance- Dec 31, 2020		1,042,000

STOREY CORPORATION

BALANCE SHEET(Partial) AS ON DEC 31,2020

Stockholder's Equity

Paid -in Capital

capital stock

6%Preferred Stock-$50 Par-Authorized 20,000 Shares & Issued-15000 Shares(15000*50)		750,000
Common Stock-$10 Par- Authorized 500,000 Shares & Issued-250,000	2,500,000
Common stock Dividend Distributable -25000 Shares*$10	250,000	2,750,000
Total Capital Stock		3,500,000

Additional Paid-in Capital

Paid in Capital in Excess of Par - Preferred Stock	250,000
Paid in Capital in Excess of Par - Common Stock	400,000
Total Additional Paid-in Capital		650,000
Total Paid in Capital		4,150,000
Retained Earnings - See note		1,042,000
Total Shareholders Equity		5,192,000

Note - Retained Earnings is Restricted For $200,000 for Plant Expansion

Total cash Dividend		250,000
Allocated Tp Preferred Stock:
Dividend in Arrears-$750000*6%	45,000
Current Year-2020	45,000	90,000
Balance Paid to Common Stock		160,000