Question

Dorados Corporation has been authorized to issue 20,000 shares of $100 par value cumulatve 6%, preferred stock and 200,000 shares of $10 par common stock The stockholders equity accounts of Dorados Corporation at January 1, 2018, are as follows $500,000 $B00,000 Preferred Stock Common Stock Paid-in Capital in Excess of Par-Preferred Stock $100,000 Paid-in Capital in Excess of Par-Common Stock $200,000 Retained Earnings $500000 There were no dividends in arrears on preferred stock During 2018, the company had the following transactions and events. Feb. 1 Declared a $0.50 per shares cash dividend on common stock of record on February 15, payable March 1 Mar. 1 Paid the dividend declared in February April 1 Discovered a S65,000 overstatement of 2017 depreciation. ignore income taxes May. 1 Announced a 3 for 1 stock split. Prior to the spit the market price per share was $26 July 1 Declared a 10% stock dividend on common stock when the market price of the stock was $15 per share. July 31 Issued the shares for the stock dividend Sep. 1 Issued 20,000 additional shares of common stock for $17 per share Dec. 15 Declared a 6% cash dividend on preferred stock payable January 31, 2019. Dec. 31 Determined that net income for the year was $400,000. Instructions (a) Journalize the transactions and the closing entry for net inoome (b) Enter the beginning balances in the accounts and post to the stockholders equity accounts. (Note: Open additional stockholders' equity accounts as needed) (c) Prepare a retained earnings statement for the year (d) Prepare a stockholders' equity section at December 31, 2018

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