Kirsch Enterprises Inc. produces aeronauticalnavigationequipment. The stockholders equity accounts ofkirschEnterprises Inc., with balances on january 1, 2010, areasfollows;

Common Stock, $20 stated value (250,000 sharesauthorized,175,000 shares issued)....3,500,000

Paid in capital in excess stated value....1,750,000

Retained earnings.... 4,600,000

Treasury Stock (40,000 shares at cost)

The following selected transactions occured during the year.

Jan. 6. Paid cash dividends of $0.40 per share on commonstock.the dividend had been properly recorded when declared on nov.29 ofthe preceding fiscal year for 54,000.

Mar. 9 Sold all of the treasury stock for 1,350,000

Apr. 3 Issued 50,000 shares of common stock for 1,700,000.

July 30. Declared a 2% stock dividend on common stock,tobe capitalized at the market price of the stock, which is 36$pershare.

Aug. 30. Issued the certificates for the dividend declaredonJuly 30.

Nov. 7. purchased 25,000 shares of treasury stockfor800,000.

Dec. 30 declared a $0.45 per share dividend on common stock

31. Closedthecredit balance of the income summary account 400,000

31. Closedthetwo dividends accounts to retained earnings.

Instructions:

1. Enter the january 1 balances inT-accountsfor the stockholders equity accounts listed. Alsopreparet-accounts for the following; Paid in capital from sale oftreasurystock, stock dividends distributable, stock dividends,cashdividends.

2. journalize the entries to recordthetransactions, and post to the eight selectedaccounts.

3. Prepare a reatained earnings statementforthe year ended Dec 31, 2010.

4. Prepare the stockholders equity sectionofthe december 31, 2010 balance sheet.