Task: (Dividends and Stockholders' Equity Section)
Anne Cleves Company reported the following amounts in the stockholders' equity of its December 31, 2006, balance sheet.
Preferred stock, 10%, $100 par (10,000 shares authorized, 2,000 shares issued) $200,000
Common stock, $5 par (100,000 shares authorized 20,000 shares issued) 100,000
Additional paid-in capital 125,000
Retained earnings 450,000
Total $875,000
Instructions:
Q1. Prepare journal entries to record the transactions described above.
Q2. Prepare the December 31, 2007, stockholders' equty section. Assume 2007 net income was $330,000.