Problem 11-5A (Part Level Submission) The post-closing trial balance of Bramble
ID: 2569800 • Letter: P
Question
Problem 11-5A (Part Level Submission) The post-closing trial balance of Bramble Corp. at December 31, 2019, contains the following stockholders' equity accounts. Preferred Stock (14,300 shares issued) Common Stock (244,000 shares issued) Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Par-Common Stock Common Stock Dividends Distributable Retained Earnings $715,000 3,660,000 244,000 417,000 366,000 848,960 A review of the accounting records reveals the following. 1. No errors have been made in recording 2019 transactions or in preparing the closing entry for net income. 2. Preferred stock is $50 par, 696, and cumulative: 14,300 shares have been outstanding since January 1, 2018. 3. Authorized stock is 19,300 shares of preferred, 488,000 shares of common with a $15 par value. 4. The January 1 balance in Retained Earnings was $1,110,000. 5. on July 1, 20,500 shares of common stock were issued for cash at $16 per share. 6. On September 1, the company discovered an understatement error of $85,200 in computing depreciation in 2018, which overstated net income. The net of tax effect of $59,640 was properly debited directly to Retained Earnings. 7. A cash dividend of $366,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2018. 8, on December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $16. Net income for the year was $555,000. 10, on December 31, 2019, the directors authorized disclosure of a $191,000 restriction of retained earnings for plant expansion. [use Note X.Explanation / Answer
Retained Eranings Sep 1 prioi adj 59640 Jan 1 Balance 1110000 Dec 31 Cash Dividend 366000 Dec 31 Net Income 555000 Dec 31 Stock Dividend 390400 Dec 31 Balance 848960 Balance Sheet Stockholder Equity For the yEar ended Dec 31 2019 Capital Stock Preferred Stock 715000 Common stock 3660000 Total Capital Stock 4375000 Additional Paid in capital Paid in capital in excess of par-Preferred Stock 244000 Paid in capital in excess of par-Common Stock 417000 Total Additional paid in capital 661000 Total Paid in capital 5036000 Retained Eranings 848960 Total Paid in capital & Retained Eranings 5884960 working Trans Accounts Title Dr Cr 5 Cash 328000 Common stock (20500*15) 307500 Paid in capital in excess of par-Common Stock 20500 8 Retained eranings 390400 Common stock (244000)*10%*15 366000 Paid in capital in excess of par-Common Stock 24400