Equity; Retirement and Stock Dividend: Davison Enterprises reported the following description of shareholders' equity on 31 December 20X6:

There were no dividends in arrears. The following transactions took place in 20X7:

20 Feb. Redeemed 1,000 preferred shares at the call price.

28 Feb. Declared \(\$ 100,000\) in dividends. Specify the distribution of the dividend between common and preferred shares.

31 Mar. Retired 8,000 common shares for \(\$ 12\) per share.

2 Apr. Declared and distributed a \(3 \%\) stock dividend on the common shares, valued at \(\$ 11.50\) per share. Fractional share rights were issued for 200 of the shares.

30 Apr. \(40 \%\) of the fractional share rights were exercised, and the remainder lapsed.

Required:

1. Journalize the listed transactions.

2. Prepare the revised contributed capital section of the statement of financial position, reflecting the entries in requirement ( 1 ). Earnings were \(\$ 820,000\) for the year.

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Contributed Capital Preferred shares, $1, no-par, 100,000 shares authorized, cumulative, redeemable at company's option at $107 plus dividends in arrears. Each preferred share is convertible into 10 common shares. Issued and outstanding. 20,000 shares Common shares, no-par, unlimited shares authorized and 80,000 issued and outstanding Contributed capital on retirement of common shares Retained earnings $2,040,000 640,000 120,000 2,800,000 1,600,000 $4,400,000