On October 1, 2021, Nicklaus Corporation receives permission to replace its $1 par value common stock (6,000,000 shares authorized, 4,000,000 shares issued, and 3,800,000 shares outstanding) with a new common stock issue having a $0.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 stock split. That is, the shareholders will receive two shares of the $0.50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the issuing corporation. On November 1, 2021, the Nicklaus Corporation declares a $0.21 per share cash dividend on common stock and a $0.38 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2021, to shareholders of record on November 15, 2021. On December 2, 2021, the Nicklaus Corporation declares a 1% stock dividend payable on December 28, 2021, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $10 per share. The dividend will result in 76,000 (0.01 7,600,000) additional shares being issued to shareholders. Required: 1. Prepare journal entries to record the declaration and payment of these stock and cash dividends. 2. Prepare the December 31, 2021, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,900,000.) 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2021.

RETAINED EARNINGS FOR BALANCE SHEET - SHAREHOLDERS' EQUITY SECTION DECEMEBER 31, 2021.

AND

PREPARE A STATEMENT OF STOCKHOLDERS EQUITY OF NICKLAUS CORPORATION FOR 2021.

NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section March 31, 2021 Shareholders' equity Common stock $ 4,000,000 Preferred stock 10,000,000 Paid-in capital - excess of par 76,000,000 Retained earnings 1,900,000 Total shareholders' equity $ 91,900,000 NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section September 30, 2021 Shareholders' equity Preferred stock $10,000,000 Common stock 4,000,000 Paid-in capital - share repurchase 40,000 Retained earnings 5,300,000 Less: Treasury stock Total shareholders' equity $19,340,000 (2,400,000) $ 16,940,000 No Date General Journal Debit Credit 1 October 01 No journal entry required 2 November 01 Retained earnings 2,356,000 1,596,000 Cash dividends payable, common Cash dividends payable, preferred 760,000 3 November 15 No journal entry required 4 December 01 Cash dividends payable, common 1,596,000 Cash dividends payable, preferred 760,000 Cash 2,356,000 5 December 02 Retained earnings 760,000 Common stock dividends distributable 38,000 Paid-in capital - excess of par, common 722,000 6 December 28 Common stock dividends distributable 38,000 Common stock 38,000 NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section December 31, 2021 Shareholders' equity Preferred stock $ 10,000,000 Common stock 4,038,000 Paid-in capital - excess of par 76,722,000 Paid-in capital - share repurchase 40,000 Retained earnings 2,900,000 X $ 93,700,000 Less: Treasury stock (2,400,000) Total shareholders' equity $ 91,300,000 NICKLAUS CORPORATION Statement of Shareholders' Equity For the Year Ended Dec. 31, 2021 ($ in thousands) Additional Total Preferred Common Paid-in Retained Treasury Shareholders' Stock Stock Capital Earnings Stock Equity Jan. 2, 2021 Issuance of preferred stock Issuance of common stock Purchase of treasury stock Sale of treasury stock Net income Common cash dividends Preferred cash dividends Stock dividend December 31, 2021 0 0 0 0 0 0