Identifying and Analyzing Financial Statement Effects of Dividends

The stockholders' equity of Palepu Company at December $31,2021,$ appears below.

$(1)216,000$ shares at $$10$ par value.

During $2022,$ the following transactions occurred:

May $12$ Declared and issued a $7\%$ stock dividend; the common stock market value was $$18$ per share.

Dec. $31$ Declared and paid a cash dividend of $75$ cents per share.

a$.$ Prepare the journal entries for these transactions.

b$.$ Post the journal entries to the related T$-$accounts.

Note: Enter your answers, in transaction order, in the first open field of the appropriate column in each account.

c$.$ Prepare a retained earnings reconciliation for $2022$ assuming that the company reports $2022$ net income of $$425,000.$

Note: Use negative signs with your answers, when appropriate.

Palepu Company

Statement of Retained Earnings

For the Year Ended Dec. $31$

$