journalize the transactions and the closing entry for net income 581396

The stockholders’ equity accounts of Motz Inc., at January 1, 2012, are as follows.

Preferred Stock, $100 par, 7%	$600,000
Common Stock, $10 par	900,000
Paid in Capital in Excess of Par—Preferred Stock	100,000
Paid in Capital in Excess of Par—Common Stock	200,000
Retained Earnings	500,000

There were no dividends in arrears on preferred stock. During 2012, the company had the following transactions and events.

July	1	Declared a $0.50 cash dividend on common stock.
Aug.	1	Discovered a $72,000 overstatement of 2011 depreciation on equipment. 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 $16 per share.
	15	Declared a 7% cash dividend on preferred stock payable January 31, 2013.
	31	Determined that net income for the year was $350,000.

Instructions

(a) Journalize the transactions and the closing entry for net income.

(b) Enter the beginning balances in the accounts and post to the stockholders’ equity accounts.

(d) Prepare a stockholders’ equity section at December 31, 2012.