*Problem 11-4A The ledger of Wade Corporation at December 31, 2014, after the bo
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*Problem 11-4A The ledger of Wade Corporation at December 31, 2014, after the books have been closed, contains the following stockholders' equity accounts. $1,000,000 1,500,000 Preferred Stock (10,000 shares issued) Common Stock (300,000 shares issued) Paid-in Capital in Excess of Par Value-Preferred Stock Paid-in Capital in Excess of Stated Value-Common Stock1,600,000 Retained Earnings 2,860,000 A review of the accounting records reveals this information: 1. Preferred stock is 896, $100 par value, noncumulative. Since January 1, 2013, 10,000 shares have been outstanding; 20,000 shares are authorized. 2. Common stock is no-par with a stated value of $5 per share; 600,000 shares are authorized 3. The January 1, 2014, balance in Retained Earnings was $2,380,000. 4. On October 1, 60,000 shares of common stock were sold for cash at $9 per share. 5. A cash dividend of $400,000 was declared and properly allocated to preferred and common stock on November 1. No dividends were paid to preferred stockholders in 2013. 6. Net income for the year was $880,000. 7. On December 31, 2014, the directors authorized disclosure of a $160,000 restriction of retained earnings for plant expansion. (Use Note A.)Explanation / Answer
Retained Earnings for the year ended 31 dec 2014 Opening balance $2,380,000 Add: Net Income $880,000 Less: Dividend Payable ($400,000) Ending Balance $2,860,000 Total Liabilities & stockholder Equity Stockholder Equity Paid-in capital 8%Preferred Stock $100 par 20000 shares authorized and 10000 shares issued $1,000,000 Common Stock stated value $5, 600000 shares authorized and 300000 shares issued $1,500,000 Paid in capital $2,500,000 Additional Paid-in capital Paid-in Capital in Excess of Par Value—Preferred Stock $200,000 Paid-in Capital in Excess of Par Value—Common Stock $1,600,000 Total additional Paid in capital $1,800,000 Total paid in capital $4,300,000 Retained earnings $2,860,000 Total Stockholder equity $7,160,000
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