Pearson began 2012 with 30,000 $1 common shares issued and outstanding. Paid in capital in excess of par was $25,000 and retained earnings were $175,000. Net income for 2012 was $22,000. Peason had outstanding 5000 shares of $4.00 par, 5% preferred stock. Pearson Wood Supplies completed the following transactions for 2012.
Jan 2 Issued 10,000 shares $1 par common stock for $10 per share
6 Declared a cash dividend on 5,000 shares of 5% $4 par preferred stock and a $.20 per share dividend on 40,000 shares of common stock outstanding.
The date of record is January 15 and the date of payment is Jauary 20.
20 Paid the cash dividend
March 15 Declared a 2-for-1 stock split by calling in the 40,000 shares of $1 par common stock and issuing new stock in its place
April 10 Declared and distributed a 10% stock dividend on the common stock when the market value was $12 per share
June 14 Purchased 1,000 shares of common stock for the treasury for $13 per share
Dec 22 Sold 500 treasury shares for $15 per share
Required:
1. Record the transactions in the journal.
2. Prepare the statement of shareholders' equity for 20XX.