BTA112 Principle Accounting Exercise - LAGCC BTA112 - Assignment

The stockholders' equity accounts of Hashmi Company at January 1, 2010, are as follows.
Preferred Stock, 6%, $50 par
$600,000
Common Stock, $5 par
800,000
Paid-in Capital in Excess of Par Value—Preferred Stock
200,000
Paid-in Capital in Excess of Par Value—Common Stock
300,000
Retained Earnings
800,000
There were no dividends in arrears on preferred stock. During 2010, the company had the following transactions and events.
July 1
Declared a $0.50 cash dividend on common stock.
Aug. 1
Discovered $25,000 understatement of 2009 depreciation. Ignore income taxes.
Sept. 1
Paid the cash dividend declared on July 1.
Dec. 1
Declared a 10% stock dividend on common stock when the market value of the stock was $18 per share.
15
Declared a 6% cash dividend on preferred stock payable January 15, 2011.
31
Determined that net income for the year was $355,000.
31
Recognized a $200,000 restriction of retained earnings for plant expansion.
Dec.
 1
Retained Earnings (16,000 X $18)
288,000
Common Stock Dividends
  Distributable (16,000 X $5)
 80,000
Paid-in Capital in Excess of
  Par Value—Common Stock
  (16,000 X $13)
208,000
Hint: Journalize and post transactions; prepare retained earnings statement and stockholders' equity section. (SO 1, 2, 3)
Instructions
(a) Journalize the transactions, events, and closing entry.
(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. Ending balance $726,000
(d) Prepare a stockholders' equity section at December 31, 2010. Total stockholders' equity $2,914,000
(a)
July
 1
Retained Earnings
  [($800,000 ÷ $5) X $.50]
80,000
Dividends Payable—Common
  Stock
80,000
Aug.
 1
Retained Earnings
 25,000
Accumulated Depreciation
 25,000
Sept.
 1
Dividends Payable—Common
  Stock
80,000
Cash
80,000
Dec.
 1
Retained Earnings (16,000 X $18)
288,000
Common Stock Dividends
  Distributable (16,000 X $5)
 80,000
Paid-in Capital in Excess of
  Par Value—Common Stock
  (16,000 X $13)
208,000
15
Retai...