Comprehensive Dakota Corporation had the following shareholders' equity account balances at December 31, 2018: Preferred stock...

Comprehensive Dakota Corporation had the following shareholders' equity account balances at December 31, 2018: Preferred stock $1,800,000 Additional paid-in capital on preferred stock 90,000 Common stock 5,150,000 Additional paid-in capital on common stock 3,500,000 Retained earnings 4,000,000 Unrealized decrease in value of marketable equity securities 245,000 Treasury common stock 270,000 Transactions during 2019 and other information relating to the shareholders' equity accounts were as follows: 1. Dakota's preferred and common shares are traded on the over-the-counter market. At December 31, 2018, Dakota had 100,000 authorized shares of $100 pac, 10%, cumulative preferred stock; and 3,000,000 authorized shares of no-par common stock with a stated value of $5 per share. 2. On January 9, 2019, Dakota formally retired all 30,000 shares of its treasury common stock and had them revert to an unissued basis. The treasury stock had been acquired on January 20, 2018. The shares were originally issued at $10 per share. 3. Dakota owned 10,000 shares of Bush Inc. common stock purchased in 2016 for $750,000. The Bush stock was included in Dakota's short-term marketable securities portfolio at the end of 2018 at a value of $650,000, On February 13, 2019, Dakota declared a dividend in kind of share of Bush for every 100 shares of Dakota common stock held by shareholders of record on February 27, 2019. The market price of Bush common stock was $63 per share on February 13, 2019. The dividend in kind was distributed on March 12, 2019. 4. On April 2, 2019, 250,000 stock rights were issued to the common shareholders permitting the purchase of new share of common stock in exchange for I right and $11 cash. On April 23, 2019, 210,000 stock rights were exercised when the market price of Dakota's common stock was $13 per share. Dakota issued new shares to settle the transaction. The remaining 40,000 rights were not exercised and expired. 5. On December 10, 2019, Dakota declared the yearly cash dividend on preferred stock, payable on January 14, 2020, to shareholders of record on December 31, 2019. 6. After the year-end adjustment, the Unrealized Decrease in value of Marketable Equity Securities account had a debit balance of $135.000 at December 31, 2019 7. On January 14, 2020, before the accounting records were closed for 2019, Dakota became aware that rent income for the year ended December 31, 2018, was overstated by $500,000. The after-tax effect on 2018 net income was $275,000. The appropriate correcting entry was recorded the same day. 8. After correcting the rent income, net income for 2019 was $2,600,000 Required:

5. On December 10, 2019, Dakota declared the yearly cash dividend on preferred stock, payable on January 14, 2020, to shareholders of record on December 31, 2019 6. After the year-end adjustment, the Unrealized Decrease in Value of Marketable Equity Securities account had a debit balance of $135,000 at December 31, 2019. 7. On January 14, 2020, before the accounting records were closed for 2019, Dakota became aware that rent income for the year ended December 31, 2018, was overstated by $500,000. The after-tax effect on 2018 net income was $275,000. The appropriate correcting entry was recorded the same day. 8. After correcting the rent income, net income for 2019 was $2,600,000 Required: 1. Prepare Dakota's statement of retained earnings for the year ended December 31, 2019. Assume that only single-period financial statements for 2019 are presented DAKOTA CORPORATION Statement of Retained Earnings For the Year Ended December 31, 2019 Balance, December 31, 2018, as originally reported Less: Prior period adjustment from error overstating rent income Less: Income tax effect As restated Add: Net Income $ 6.325.000 ✓ Deduct dividends: Cash dividend on preferred stock Dividend in kind on common stock Balance, December 31, 2019

2. Prepare the shareholders' equity section of Dakota's balance sheet at December 31, 2019. DAKOTA CORPORATION Shareholders' Equity Section of Balance Sheet December 31, 2019 Contributed Capital Preferred stock, $100 par, 10% cumulative Common stock, $5 stated value Additional paid-in capital On preferred stock On common stock From treasury stock Total additional paid in capital Retained earnings Accumulated other comprehensive income (less) Unrealized decrease in value of marketable equity securities Total shareholders' equity