Part A In late 2020, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 6,000,000 shares of common stock carrying a $1 par value, and 2,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2021, 4,000,000 shares of the common stock are issued in exchange for cash at an average price of $10 per share. Also on January 2, all 2,000,000 shares of preferred stock are issued at $20 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2021. (Assume net income for the first quarter 2021 was $1,850,000.) Part B During 2021, the Nicklaus Corporation participated three treasury stock transactions: a. On June 30, 2021, the corporation reacquires 270,000 shares for the treasury at a price of $12 per share. b. On July 31, 2021, 35,000 treasury shares are reissued at $15 per share. c. On September 30, 2021, 35,000 treasury shares are reissued at $10 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2021. (Assume net income for the second and third quarter was $3,350,000.) Part C 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 $0.20 per share cash dividend on common stock and a $0.37 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 2% 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 152,000 (0.02 x 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 $2,850,000.) 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2021. Required 1 Part A Required 2 Part A Required 1 Part B Required 2 Part B Required 1 Part C Required 2 Part C Required 3 Part C Prepare the December 31, 2021, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,850,000.) NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section December 31, 2021 Shareholders' equity Common stock $ 4,076,000 Preferred stock 10,000,000 Paid-in capital - excess of par 67,444,000 Paid-in capital - share repurchase 35,000 Retained earnings 81,555,000 Less: Treasury stock Total shareholders' equity $ 81,555,000 Required 1 Part A Required 2 Part A Required 1 Part B Required 2 Part B Required 1 Part C Required 2 Part 6 Required 3 Part C Prepare a statement of shareholders' equity for Nicklaus Corporation for 2021. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.) NICKLAUS CORPORATION Statement of Shareholders' Equity For the Year Ended Dec. 31, 2021 ($ in thousands) Additional Total Preferred Common Shareholders' Paid-in Capital Retained Earnings Treasury Stock Stock Stock Equity Jan. 2, 2021 Issuance of preferred stock Issuance of common stock 10,000 4,000 Purchase of treasury stock Sale of treasury stock Net income Common cash dividends Preferred cash dividends 76 Stock dividend December 31, 2021 10,000 4,076 0 0 0