Goldberg Corporation had the following stockholders' equity accounts on January 1, 2006: Common Stock ($5 par) $500,000, Paid-in Capital in Excess of Par Value $200,000, and Retained Earnings $100,000. In 2006, the company had the following treasury stock transactions.

Mar. 1 Purchased 5,000 shares at $8 per share.

June 1 Sold 1,000 shares at $12 per share.

Sept. 1 Sold 2,000 shares at $10 per share.

Dec. 1 Sold 1,000 shares at $6 per share.

Goldberg Corporation uses the cost method of accounting for treasury stock. In 2006, the company reported net income of $40,000.

Instructions

(a) Journalize the treasury stock transactions, and prepare the closing entry at December 31, 2006, for net income.

(b) Open accounts for ( 1 ) Paid-in Capital from Treasury Stock, (2) Treasury Stock, and (3 ) Retained Earnings. Post to these accounts using J10 as the posting reference.

(c) Prepare the stockholders' equity section for Goldberg Corporation at December 31, 2006.