On January 1, 2020, Smith Corporation had the following balances in the balances in its stockholders equity

accounts.

Common Stock ($10 par value, 120,000 shares issued and outstanding) $1,200,000

Paid-in Capital in Excess of Par-Common Stock 200,000

Retained Earnings 600,000

The following transactions occurred during the year.

Jan. 1 Declared a $1 cash dividend per share to stockholders of record on January 15, payable February 1.

Feb. 1 Paid the dividend declared in January.

Mar. 1 Announced a 2-for-1 stock split. Prior to the split, the market price per share was $36.

June 1 Declared a 10% stock dividend to stockholders of record on June 15, distributable June 30. On June 1 the market price of the stock was $13 per share.

June 30 Issued the shares for the stock dividend.

Dec. 1 Declared a $.50 per share dividend to stockholders of record on December 15, payable January 10, 2016.

Dec 31 Determined that net income for the year was $350,000.

Instructions

a.Journalize the above transactions.

b. Journalize the closing entries for net income and dividends.

c.Enter the beginning balances in the stockholders equity accounts and post the above journal entries.

(You will need to open additional stockholders equity accounts as needed.)

d. Prepare the stockholders equity section of the balance sheet as of December 31.