P 11-36 03, LO4, LOS Stockholders' Equity, Dividends, and Treasury Stock The stockholders' equity section of Nielsen Corporation's December 31, 2008, balance sheet is as follows: KA KLOOSTER $ 50,000 Stockholders' equity: Preferred stock (10%, $50 par, 10,000 shares authorized, 1,000 shares issued and outstanding) Common stock ($15 par, 100,000 shares authorized, 5,000 shares issued and outstanding) Paid-in capital in excess of par, preferred stock Paid-in capital in excess of par, common stock Total contributed capital Retained earnings Total stockholders' equity 75,000 2,000 25,000 $152,000 102,000 $254.000 During 2009, Nielsen Corporation had the following transactions affecting stockholders equity Jan. 20 Paid a cash dividend of $2 per share on common stock. The dividend was de clared on December 15, 2008. Aug. 15 Reacquired 1,000 shares of common stock at $20 per share. Sept. 30 Reissued 500 shares of treasury stock at $21 per share. Oct. 15 Declared and paid cash dividends of $3 per share on the common stock. Nov. 1 Reissued 200 shares of treasury stock at $18 per share. Dec. 15 Declared and paid the 10% preferred cash dividend. 31 Closed net income of $40,000 to Retained Earnings. (Revenues were $260,000; expenses were $220,000.) Also closed the dividends accounts to Retained Earnings Required: 1. Journalize the transactions 2. Prepare the stockholders' equity section of Nielsen Corporation's December 31, 2009, balance sheet 3. Interpretive Question: What is the effect on earnings per share when a company pur- chases treasury stock? P 11-34 LO3 Recording Stockholders' Equity Transactions Zina Corporation was organized during 2008. At the end of 2008, the stockholders' equity section of the balance sheet appeared as follows: (continued) EOC Equity Financing Chapter 11 547 KA 43 $240,000 Contributed capital: Preferred stock (5%, $30 par, 15,000 shares authorized, 8,000 shares issued and outstanding) Common stock ($22 par, 36,000 shares authorized, 18,000 issued, 15,000 outstanding) Paid-in capital in excess of par, preferred stock Total contributed capital Retained earnings .... Total contributed capital plus retained earnings Less treasury stock (3,000 shares at cost of $28 per share) Total stockholders' equity 396,000 56,000 $692,000 244,000 $936,000 (84,000) $852,000 During 2009, the following transactions occurred in the order given: a. Issued 1,200 shares of common stock at $25 per share. b. Reissued 1,600 shares of treasury stock at $30 per share. c. Reissued 750 shares of treasury stock at $21 per share. Required: Record the transactions