The balance sheet of Mundo Foods, at December 31, 2011, reported 90,000 shares of no-par common stock authorized with 50,000 shares issued and a common stock balance of $170,000. Retained Earnings had a balance $140,000. During 2012 the company completed the following selected transactions:
March 15 - Purchased 9,000 shares of treasury stock at $7 per share.
April 30 - Distributed a 10% stock dividend on the outstanding shares of common stock. The market value of common stock was $10 per share.
Dec 31 - Earned net income of $105,000 during the year. Closed net income to Retained Earnings.
Requirements:
1. Record the transactions in the general journal. Explanations are not required.
2. Prepare the stockholders' equity section of Mundo Health Food's balance sheet at December 31, 2012.