Record stock transactions, prepare equity section of balance sheet, and calculate ratios. (LO 1, 2, 3, 5, 6)

On January 1, 2008, the Premier Corporation shareholders' equity account balances were as follows.

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a. Show the transactions in the accounting equation.

b. Prepare the shareholders' equity section of the balance sheet at December 31, 2008.

c. Compute earnings per share and return on common shareholders' equity.

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Preferred stock (8%, $100 par noncumulative, 15,000 shares authorized) Common stock (S1 par value, 5,000,000 shares authorized) Additional paid-in capital, preferred stock Additional paid-in capital, common stock $ 400,000 1,000,000 20,000 21,500,000 Retained earnings Treasury stock-common (10,000 shares, at cost) During 2008, Premier Corporation engaged in the following transactions. Jan. 7 Feb. 8 June 1 Dec. 1 50,450,000 230,000 Issued 5,000 shares of common stock for $25 per share Purchased 1,000 additional shares of common treasury stock at $24 per share Declared the annual cash dividend on preferred stock, payable June 30 Declared a $0.30 per share cash dividend to common stockholders payable December 31, 2008 Net income for the year was $1,980,000.