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Exercise 11-21 Cash dividends, treasury stock, and statement of retained earnings LO C3, P2, P3 Alexander Corporation reports the following components of stockholders' equity at December 31, 2018. Common stock-$25 par value, 50,000 shares authorized, 30,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ 750,000 50,000 340,000 $1,140,000 During 2019, the following transactions affected its stockholders' equity accounts Jan. 2 Purchased 3,000 shares of its own stock at $25 cash per share. Jan. 7 Directors declared a $1.50 per share cash dividend payable on February 28 to the February 9 stockholders of record, Feb. 28 Paid the dividend declared on January 7. July 9 Sold 1,200 of its treasury shares at $30 cash per share. Aug 27 Sold 1,500 of its treasury shares at $20 cash per share. Sept. 9 Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record. Oct. 22 Paid the dividend declared on September 9. Dec. 31 closed the $52,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Required: 1. Prepare journal entries to record each of these transactions. 2. Prepare a statement of retained earnings for the year ended December 31, 2019 3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2019. Debit Credit General Journal No Date Jan 02 75,000 1 Treasury stock, common Cash >> 75,000 40,500 2 Jan 07 Retained earnings Common dividend payable 40,500 O 3 Feb 28 40,500 Common dividend payable Cash >> 40,500 4 Jul 09 36,000 Cash Paid-in capital, treasury stock Treasury stock, common OO 6,000 30,000 5 > Aug 27 Cash Pald-in capital, treasury stock Treasury stock, common 30,000 7,500 37,500 6 Sep 09 59,400 Retained earnings Common dividend payable 59,400 7 Oct 22 59,400 Common dividend payablo Cash 59.400 8 Dec 31 Income summary Dan 52,000 Required 1 Required 2 Required 3 Prepare a statement of retained earnings for the year ended December 31, 2019. (Amounts to be deducted should be Indicated by a minus sign.) ALEXANDER CORPORATION Statement of Retained Earnings For Year Ended December 31, 2019 Beginning retained earnings $ 340,000 Add Net Income 52,000 IS 392,000 Loss Cash dividends declared 99,900 Less: Treasury stock reissuances 292,100 Ending retained eamings $ 784,000 Required 1 Required 3 > Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2019. (Amounts to be deducted should be indicated by a minus sign.) ALEXANDER CORPORATION Stockholders' Equity Section of the Balance Shoot December 31, 2019 Common stock - $25 par value $750,000 Paid.in capital in excess of par value, common stock 48,500 Retained earnings 292.100 Loss: Cost of treasury stock 7,500 Total stockholders' equity $ 1,098,100