|Common stock—$25 par value, 100,000 shares authorized,
45,000 shares issued and outstanding
|Paid-in capital in excess of par value, common stock||60,000|
|Total stockholders’ equity||$||1,585,000|
During 2019, the following transactions affected its stockholders’ equity accounts.
|Jan.||2||Purchased 5,500 shares of its own stock at $20 cash per share.|
|Jan.||5||Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of record.|
|Feb.||28||Paid the dividend declared on January 5.|
|July||6||Sold 2,063 of its treasury shares at $24 cash per share.|
|Aug.||22||Sold 3,437 of its treasury shares at $17 cash per share.|
|Sept.||5||Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record.|
|Oct.||28||Paid the dividend declared on September 5.|
|Dec.||31||Closed the $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings.|
1. Prepare journal entries to record each of these transactions.
2. Prepare a statement of retained earnings for the year ended December 31, 2019.
3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2019