| Problem 14-2A |  |
The stockholders’ equity accounts of Falk Company at January 1, 2012, are as follows. | Preferred Stock, 6%, $50 par | | $625,000 | | Common Stock, $4 par | | 636,000 | | Paid-in Capital in Excess of Par—Preferred Stock | | 187,300 | | Paid-in Capital in Excess of Par—Common Stock | | 306,900 | | Retained Earnings | | 798,400 |
There were no dividends in arrears on preferred stock. During 2012, the company had the following transactions and events. | July 1 | | Declared a $0.7 cash dividend on common stock. | | Aug. 1 | | Discovered $27,400 understatement of 2011 depreciation on equipment. Ignore income taxes. | | Sept. 1 | | Paid the cash dividend declared on July 1. | | Dec. 1 | | Declared a 14% stock dividend on common stock when the market value of the stock was $19 per share. | | 15 | | Declared a 6% cash dividend on preferred stock payable January 15, 2013. | | 31 | | Determined that net income for the year was $392,700. | | 31 | | Recognized a $218,500 restriction of retained earnings for plant expansion. |
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barkersbaseball
13 years ago
3
