Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders equity accounts of Morrow Enterprises Inc., with balances on January 1, 2016, are as follows:

Common stock, $20 stated value; 500,000 shares authorized, 383,000 issued	$7,660,000
Paid-In Capital in Excess of Stated ValueCommon Stock	957,500
Retained Earnings	35,012,000
Treasury Stock (25,700 shares, at cost)	462,600

The following selected transactions occurred during the year:

Jan.

22

Paid cash dividends of $0.06 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $21,438.

Apr.

10

Issued 77,000 shares of common stock for $23 per share.

Jun.

6

Sold all of the treasury stock for $27 per share.

Jul.

5

Declared a 3% stock dividend on common stock, to be capitalized at the market price of the stock, which is $26 per share.

Aug.

15

Issued the certificates for the dividend declared on July 5.

Nov.

23

Purchased 33,000 shares of treasury stock for $20 per share.

Dec.

28

Declared a $0.08-per-share dividend on common stock.

31

Closed the credit balance of the income summary account, $1,196,500.

31

Closed the two dividends accounts to Retained Earnings.

Required:

A.

Enter the January 1 balances in T accounts for the stockholders equity accounts listed.

B.

Journalize the entries to record the transactions, and post to the eight selected accounts. No post ref is required in the journal. Refer to the Chart of Accounts for exact wording of account titles.

C.

Prepare a retained earnings statement for the year ended December 31, 2016. Enter all amounts as positive numbers. The word Less is not required.*

D.

Prepare the Stockholders Equity section of the December 31, 2016, balance sheet. Less or Deduct will automatically appear if it is required. *

* Refer to the list of Amount Descriptions provided for the exact wording of the answer choices for text entries.

Amount Descriptions
Cash balance, July 31, 2016
Common stock, $20 stated value; 500,000 shares authorized, 383,000 issued
Common stock, $20 stated value; 500,000 shares authorized, 440,800 issued
Common stock, $20 stated value; 500,000 shares authorized, 473,800 issued
Decrease in retained earnings
Dividends
Excess of issue price over stated value
For the Year Ended December 31, 2016
From sale of treasury stock
Increase in retained earnings
Net income
Net loss
Retained earnings
Retained earnings, December 31, 2016
Retained earnings, January 1, 2016
Total
Total paid-in capital
Total stockholders equity

ASSETS REVENUE 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated D 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Selling Expenses 534 Rent Expense 535 Insurance Expense 536 Office Supplies Expense 537 Organizational Expenses 582 Depreciation Expen 590 Miscellaneous Expense 710 Interest Expense quipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 236 Stock Dividends Distributable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 311 Common Stock 313 Paid-In Capital in Excess of Stated Value-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends 390 Income Summary