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Question
Dawls Corporation reported stockholders' equity on December 31 of the prior year as follows:
| Common stock, $5 par value, 1,000,000 shares authorized, 500,000 shares issued. | $2,500,000 |
| Paid-in capital in excess of par, common stock... | 1,000,000 |
| Retained earnings. | 3,000,000 |
The following selected transactions occurred during the current year:
| Feb. 15 | The board of directors declared a 5% stock dividend to stockholders of |
| record on March 1, payable March 20. The stock was selling for $8 per share. | |
| Mar. 9 | Distributed the stock dividend. |
| May 1 | A cash dividend of $0.30 per share was declared by the board of directors |
| to stockholders of record on May 20, payable June 1. | |
| June 1 | Paid the cash dividend. |
| Aug. 20 | The board decided to split the stock 4-for-1, effective on September 1. |
| Sept. 1 | Stock split 4-for-1. |
| Dec. 31 | Earned a net income of $800,000 for the current year. |
Prepare a statement of retained earnings as of December 31 of the current year.
Answer
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Related questions
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