Last August 31, Redondo Corporation had a \(\$ 650,000\) credit balance in its Retained Earnings account. On that date, the corporation's contributed capital consisted of 60,000 authorized shares of \(\$ 100\) par, common stock of which 5,000 shares had been issued at \(\$ 115\) and were outstanding. It then completed the following transactions:

1990 Sept. 1 The board of directors declared a \(\$ 7\) per share dividend on the common stock, payable on October 4 to the September 15 stockholders of record.

Oct. 4 Paid the dividend declared on September 1.

Nov. 11 The board declared a \(10 \%\) stock dividend, distributable on December 8 to the November 20 stockholders of record. The stock was selling at \(\$ 125\) per share.

Dec. 8 Distributed the stock dividend declared on November 11.

31 Since December 31 is the end of the accounting year, closed the Income Summary account, which had a credit balance of \(\$ 192,500\). Also closed the Cash Dividends Declared and Stock Dividends Declared accounts.

1991 Jan. 10 The board of directors voted to split the corporation's stock 5 for 1 by calling in the old stock and issuing five \(\$ 20\) par value shares for each \(\$ 100\) share held. The stockholders voted approval of the split and authorization of 100,000 new \(\$ 20\) par value shares to replace the \(\$ 100\) shares; all legal requirements were met; and the split was completed on February 5.

\section*{Required}
1. Prepare general journal entries to record these transactions and to close the Income Summary account at year-end. (No entry is required for the split; however, a memorandum reciting the facts would be entered in the Common Stock account.)
2. Under the assumption Chris Reed owned 500 of the \(\$ 100\) par value shares on August 31 and neither bought nor sold any shares during the period of the transactions, prepare a schedule with columns for the date, supporting calculations, book value per share, and book value of Reed's shares. Then complete the schedule by calculating the book value per share of the corporation's stock and the book value of Reed's shares at the close of business on August 31, September 1, October 4, December 8, December 31, and February 5 . Assume that the only income earned by the company during these periods was the \(\$ 192,500\), which was earned and closed on December 31.
3. Prepare three stockholders' equity sections for the corporation, the first showing the stockholders' equity on August 31, the second on December 31, and the third on February 5.