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The post-closing trial balance of Storey Corporation at December 31, 2017, contains the following stockholders' equity accounts. Preferred Stock (15,000 shares issued) $ 750,000 Common Stock (250,000 shares issued) 2,500,000 Paid-in Capital in Excess of Par-Preferred Stock 250,000 Paid-in Capital in Excess of Par-Common Stock 400,000 Common Stock Dividends Distributable 250,000 Retained Earnings 1,042,000 A review of the accounting records reveals the following. 1 No errors have been made in recording 2017 transactions or in preparing the closing entry for net income. 2. Preferred stock is $50 par, 6%, and cumulative; 15,000 shares have been outstanding since January 1, 2016. 3 Authorized stock is 20,000 shares of preferred, 500,000 shares of common with a $10 par value. 4 The January 1 balance in Retained Earnings was $1,170,000. 5 On July 1, 20,000 shares of common stock were issued for cash at $16 per share. 6 On September 1, the company discovered an understatement error of $90,000 in computing salaries and wages expense in 2016. The net of tax effect of $63,000 was properly debited directly to Retained Earnings. 7 A cash dividend of $250,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2016. 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. 9 Net income for the year was $585,000. 10 On December 31, 2017, the directors authorized disclosure of a $200,000 restriction of retained earnings for plant expansion. (Use Note X.) Instructions (a) Reproduce the Retained Earnings account (T-account) for 2017. (b) Prepare a retained earnings statement for 2017. (c) Compute the allocation of the cash dividend to preferred and common stock

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