The stockholders' equity accounts of Chung Corporation on January 1, 1998, were Journalize transactions, post. as follows:

During 1998 the corporation had these transactions and events pertaining to its stockholders' equity:
Feb. 1 Issued 4,000 shares of common stock for \(\$ 25,000\).
Mar. 20 Purchased 1,000 additional shares of common treasury stock at \(\$ 8\) per share.
Oct. 1 Declared a \(10 \%\) cash dividend on preferred stock, payable November 1 .
Dec. 1 Declared a \(\$ .40\) per share cash dividend to stockholders of record on December 15, payable December 31, 1998.
31 Determined that net income for the year was \(\$ 215,000\). At December 31 the market price of the common stock was \(\$ 10\) per share.
\section*{Instructions}

(a) Journalize the transactions.

(b) Enter the beginning balances in the accounts and post the journal entries to the stockholders' equity accounts. (Use T accounts.)

(c) Prepare the stockholders' equity section of the balance sheet at December 31, 1998.

(d) Calculate the dividend yield, payout ratio, earnings per share, price-earnings ratio, and return on common stockholders' equity ratio.

Transcribed Image Text:

Preferred Stock (10%, $100 par noncumulative, 5,000 shares authorized) Common Stock ($5 stated value, 300,000 shares authorized) Paid-in Capital in Excess of Par Value-Preferred Stock Paid-in Capital in Excess of Stated Value-Common Stock Retained Earnings Treasury Stock-Common (5,000 shares) $ 300,000 1,000,000 15,000 400,000 488,000 40,000