Ellis Transport Company acquired 1.2 million shares of stock in L&K Corporation at $44 per share. They are reported by Ellis at "fair value through net income." Ellis sold 200,000 shares at $46, received a 10% stock divi- dend, and then later in the year sold another 100,000 shares at $43. Hint: There is no entry for the stock dividend, but a new investment per share must be calculated for use later when the shares are sold. Required: Prepare journal entries to record these transactions. Part A In late 2020, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 5,000,000 shares of common stock carrying a $1 par value, and 1,000,000 shares of SS par value, noncumulative, nonpar- ticipating preferred stock. On January 2, 2021, 3,000,000 shares of the common stock are issued in exchange for cash at an average price of $10 per share. Also on January 2, all 1,000,000 shares of preferred stock are issued at $20 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2021. (Assume net income for the first quarter 2021 was $1,000,000.) Part B During 2021, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2021, the corporation reacquires 200,000 shares for the treasury at a price of $12 per share. b. On July 31, 2021, 50,000 treasury shares are reissued at $15 per share. c. On September 30, 2021, 50,000 treasury shares are reissued at $10 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2021. (Assume net income for the second and third quarter was $3,000,000.) Part C On October 1, 2021, Nicklaus Corporation receives permission to replace its S1 par value common stock (5,000,000 shares authorized, 3,000,000 shares issued, and 2,900,000 shares outstanding) with a new common stock issue having a $0.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 stock split. That is, the shareholders will receive two shares of the S0.50 par stock in exchange for each share of the S1 par stock they own. The S1 par stock will be collected and destroyed by the issuing corporation On November 1, 2021, the Nicklaus Corporation declares a $0.05 per share cash dividend on common stock and a $0.25 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2021. to share holders of record on November 15, 2021. 3 Liabilities and Shareholders' Equity On December 2, 2021, the Nicklaus Corporation declares a 1% stock dividend payable on December 28, 2021, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $10 per share. The dividend will result in 58.000 (0.01 x 5,800,000) additional shares being Required: 1. Prepare journal entries to record the declaration and payment of these stock and cash dividends. 2. Prepare the December 31, 2021, shareholders' equity section of the balance sheet for the Nicklaus Corpora- tion. (Assume net income for the fourth quarter was $2,500,000.) 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2021