Identifying and Analyzing Financial Statement Effects of Cash and Stock Dividends The stockholders’ equity of Rondon Company at December 31, 2016, appears below.

Common stock, $10 par value, 200,000 shares authorized;

80,000 shares issued and outstanding. . . . . . . . . . . . . . . . . . . . . . . $800,000 Paid-in capital in excess of par value. . . . . . . . . . . . . . . . . . . . . . . . . . 670,000 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419,000 During 2017, the following transactions occurred.

May 12 Declared and issued a 7% stock dividend; the common stock market value was $23 per share.

Dec. 31 Declared and paid a cash dividend of 95 cents per share.

a. Use the financial statement effects template to indicate the effects of these transactions.

b. Reconcile retained earnings for 2017 assuming that the company reports 2017 net income of $309,000.