The stockholders' equity section of Sager Company's December 31, 1997, balance sheet follows:

a. Prepare journal entries to record the 1998 transactions,

b. Prepare a statement of retained earnings for the year 1998, assuming net income for the year was \(\$ 25,800\).

c. Prepare the stockholders' equity section of the December 31,1998 , balance sheet.

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Stockholders' equity: Paid-in capital: Preferred stock-$60 par value, 5%; authorized, 5,000 shares: issued and outstanding, 2,500 shares. Common stock-without par or stated value; authorized, 50,000 shares; issued, 25,000 shares of which 500 are held in treasury. Paid-in capital in excess of par-preferred Total paid-in capital. Retained earnings: Appropriated: + $150,000 225,000 3,000 $378,000 For plant expansion Unappropriated (restricted as to dividends to the extent of $6,000, the cost of the treasury stock held) Total retained earnings Total paid-in capital and retained earnings Less: Treasury stock, common, at cost (500 shares) Total stockholders' equity $ 15,000 126,000 141,000 $519,000 6,000 $513,000