Problem 1 (20 points) The Lyster Company lists the following stockholders' equity items on 12/31/16: 8% preferred stock, $100 par, 50,000 shares authorized 10,000 shares issued $1,000,000 Common stock, $10 par, 500,000 shares authorized, 2,000,000 500,000 800,000 700,000 200,000 shares issued Paid-in Capital in excess of par-Preferred Paid-in Capital in excess of par- Common Retained Eamings Less: Treasury stock (4,000 shares at cost Total Stockholders Equity During 2017, Lyster engaged in the following transactions affecting stockholders' equity (1) On 1/1/17, Lyster established a stock option plan giing certain employees the right to purchase 20,000 shares of Lyster common stock at a price of $15. The market price of the common stock on the date of grant was S19, and the fair value of each option is S2The options may be exercised any time after 1/1/17, and the executives must be in Johnson's employ at the time of exercise. The service period is considered to be two years. (2) On 3/10, reacquired 1,000 shares of common stock by purchase at a price of $19 per share. (3) On 3/15, declared its first quarterly dividend on the preferred stock and a dividend of $.10 per share on its common stock to stockholders of record on 3/31. The dividend was paid on 4/10 (4) Not wanting to deplete its cash reserves for the expected quarterly dividend, on 6/15, declared a prelerred stock dividend and a property dividend payable on 7/15 to common stockholders of record on 6/30. The dividend consists of 19,700 shares of Baxter Corporation common stock, which has a book value of $1.20 per share. On 6/15, the stock is selling for $1.80 per share. (5) On 9/15, declared the third quarterty preferred dividend and a 1% stock dividend to common stockholders of record on 9/30, to be distributed 10/15. The market price of Lyster's common stock on 9/1 is $20. (6) On 10/31, reissued 3,000 shares of treasury stock for $20 per share. Lyster uses the FIFO cost flow assumption for its treasury stock (7) On 11/1, sold 1,000 shares of common stock to a supplier for $20 (8) On 12/15, declared the fourth quarter's dividend on preferred stock and a $.10 per share dividend on the common stock. Dvidends are payable 1/15/10 to shareholders of record on 12/31/12 (9) Net income for 2017 was $450,000 bob any adjustments you may have made above that afect income. The market price of the common stock at 12/31/17 was $21.25 per share, and the market price of the preferred stock was $110. The average price of the common stock during 2017 wars $19.60 Required a) Prepare all jounal entries required in 2017 as a result of the transactions listed abow b) Prepare, in good form, the statement of retained c) Prepare, in good form, the stockholders' equity section for Lyster as of 12/31/17 s for Lyster as of 12/31/17