On January 1, 1988, Hal Peeks purchased 800 shares of Cornfield Corporation stock at ($ 45.50) per

Question:

On January 1, 1988, Hal Peeks purchased 800 shares of Cornfield Corporation stock at $\$ 45.50$ per share. On that date, the corporation had the following stockholders' equity:

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Since purchasing the 800 shares, Mr. Peeks has neither purchased nor sold any additional shares of the company's stock. On December 31 of each year, he has received dividends on the shares held as follows: $1988, \$ 1,408 ; 1989, \$ 1,672$; and $1990, \$ 2,200$.
On June 15, 1988, at a time when its stock was selling for $\$ 51.25$ per share, Cornfield Corporation declared a $10 \%$ stock dividend that was distributed one month later. On October 25, 1989, the corporation doubled the number of its authorized shares and split its stock 2 for 1 . On May 10, 1990, it purchased 10,000 shares of treasury stock at $\$ 35.50$ per share. The shares were still in its treasury at year-end.
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Assume that Cornfield Corporation's outstanding stock had a book value of $\$ 35.75$ per share on December 31, 1988, a book value of $\$ 20.00$ per share on December 31, 1989, and a book value of $\$ 22.25$ on December 31, 1990. Do the following:
1. Prepare statements that show the nature of the stockholders' equity in the corporation at the end of 1988, 1989, and 1990.
2. Prepare a schedule that shows the amount of the corporation's net income each year for 1988, 1989, and 1990. Assume that the changes in the company's retained earnings during the three-year period resulted from earnings and dividends.