The post-closing trial balance of Wildhorse Corporation at December 31, 2022, contains the following stockholders’ equity accounts. Preferred Stock (15,800 shares issued) 790,000 Common stock (260,000 shares issued) 2,600,000 Paid-in Capital in Excess of Par – Preferred Stock 260,000 Paid-in Capital in Excess of Par-Common Stock 388,000 Common Stock Dividends Distributable 260,000 Retained Earnings 992,320 - A review of the accounting
The post-closing trial balance of Wildhorse Corporation at December 31, 2022, contains the following stockholders’ equity accounts. Preferred Stock (15,800 shares issued) 790,000 Common stock (260,000 shares issued) 2,600,000 Paid-in Capital in Excess of Par – Preferred Stock 260,000 Paid-in Capital in Excess of Par-Common Stock 388,000 Common Stock Dividends Distributable 260,000 Retained Earnings 992,320 - A review of the accounting
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter13: Corporations: Organization, Stock Transactions, And Dividends
Section: Chapter Questions
Problem 22E
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Question
The post-closing
Preferred Stock (15,800 shares issued) 790,000
Common stock (260,000 shares issued) 2,600,000
Paid-in Capital in Excess of Par – Preferred Stock 260,000
Paid-in Capital in Excess of Par-Common Stock 388,000
Common Stock Dividends Distributable 260,000
-
A review of the accounting records reveals the following.
- No errors have been made in recording 2022 transactions or in preparing the closing entry for net income.
- Preferred stock is $50 par, 6%, and cumulative; 15,800 shares have been outstanding since January 1, 2021.
- Authorized stock is 20,800
shares off preferred , 520,000 shares of common with a $10 par value. - The January 1 balance in Retained Earnings was $1,190,000.
- On July 1, 19,400 shares of common stock were issued for cash at $18 per share.
- On September 1, the company discovered an understatement error of $92,400 in computing salaries and wages expense in 2021. The net of tax effect of $64,680 was properly debited directly to Retained Earnings.
- A cash dividend of $260,000 was declared and properly allocated to preferred and common stock on October1. No dividends were paid to preferred stockholders in 2021.
- On December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $18.
- Net income for the year was $595,000.
- On December 31, 2022, the directors authorized disclosure of a $208,000 restriction of retained earnings for plant expansion. (Use Note X)
Complete two picturs and
Compute the allocation of the cash dividend to preferred and common stock.
Allocation of the cash dividend to preferred stock
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$enter a dollar amount | |
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Allocation of the cash dividend to common stock
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