On March 1, 20xx, Carmel Corporation began operations with a charter from the state that authorized 100,000 shares of $4 par value common stock.

Over the next quarter, the firm engaged in the transactions that follow.

Mar. 1 Issued 30,000 shares of common stock, $200,000.
2 Paid fees associated with obtaining the charter and starting up and organizing the corporation, $24,000.
Apr. 10 Issued 13,000 shares of common stock, $130,000.
15 Purchased 5,000 shares of common stock, $50,000 May 31 The board of directors declared a $.20 per share cash dividend to be paid on June 15 to shareholders of record on June 10.
Required 1. Record the above transactions in T accounts.
2. Prepare the stockholders’ equity section of Carmel Corporation’s balance sheet on May 31, 20xx. Net income earned during the first quarter was $30,000.
3. User Insight: What effect, if any, will the cash dividend declaration on May 31 have on Carmel Corporation’s net income, retained earnings, and cash flows?
Preferred and Common Stock Dividends and Dividends Yield