P1l-4A. St Equity: Transactions and Balance Sheet Presentation The stockholders cquity of Summit Corporation at January 1 follows: 7 Percent preferred stock, $100 par value, 20,000 shares authorized; 5,000 shares issued and outstanding Common stock, $15 par value, 100,000 shares authorized; S 500,000 40,000 shares issued and outstanding Paid-in capital in excess of par value Preferred stock Paid-in capital in excess of par value-Common stock Retained eamings 600,000 24,000 360,000 325,000 $1,809,000 Total Stockholders' Equity The following transactions, among others, occurred during the year: Jan 12 Announced a 4-for-1 common stock split, reducing the par value of the common stock Mar 31 Converted $40,000 face value of convertible bonds payable (the book value of the to S3.75 per share. The authorization was increased to 400,000 shares. bonds was $43,000) to common stock. Each $1,000 bond converted to 125 shares of common stock Acquired equipment with a fair market value of $70,000 in exchange for 500 shares of preferred stock. Junc Sept. 1 Acquired 10,000 shares of common stock for cash at S10 per share Oct. 12 Sold 1,500 treasury shares at $12 per share Nov. 21 Issued 5,000 shares of common stock at $11 cash per share. Dec. 28 Sold 1,200 treasury shares at $9 per sharc. 31 Closed net income of $95,000 to the Retained Earnings account Chapter 11 Stockholdera' Equity 66 Required a. Set up T-accounts for the stockholders' cquity accounts as of the beginning of the year and enter the January 1 balances. b. Prepare joumal entries for the given transactions and post them to the T-accounts (set up any additional T-accounts needed). Do not prepare the joumal entry for the Dec. 31 transaction, but post the appropnate amount to the Rctaincd Eamings -accoun. Detcminc the cnding balanccs for the stockholders' equity accounts c. Prepare the stockholders equity section of the balance sheet at December 31