Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Palepu Company at December 31, 2015, appears below. Common stock, $12 par value, 200,000 shares authorized; 80,000 shares issued and outstanding $960,000 Paid-in capital in excess of par value 485,000 Retained earnings 310,000 During 2016, the following transactions occurred: May 12 Declared and issued a 6% stock dividend; the common stock market value was $18 per share. Dec. 31 Declared and paid a cash dividend of 75 cents per share, Required a. Using the financial statement effects template, illustrate the effects of these transactions. Income Statement Balance Sheet Cash Asset + Noncash Assets = + $ Transaction 5/12 Declared and paid stock dividend Liabilities + Contrib. Capital + Earned Capital $57,600 + $ Revenues . Expenses = Net Income + + 12/31 Declared and issued cash dividend + b. Prepare the journal entries for these transactions. General Journal Date Description Debit Credit 5/12 Common Stock 12/31 C. Post the journal entries from b to the related T-accounts. Cash (A) Common Stock (SE) Retained Earnings (SE) Additional Paid-in Capital (SE) 5/12 5/12 5/12 5/12 12/31 12/31 12/31 12/31 d. Prepare a retained earnings reconciliation for 2016 assuming that the company reports 2016 net income of $283,000. Hint: Do not use negative signs with answers below. PALEPU COMPANY Statement of Retained Earnings For the Year Ended December 31, 2016 Retained earnings, December 31, 2015 $ Add: Less: Cash dividends declared $ Retained earnings, December 31, 2016 $