The balance sheet of MDS, Inc. included the following shareholders' equity accounts at December 31, 2012:

Paid-in capital: Preferred stock, 7.6%, 100,000 shares at $1 par $ 100,000 Common stock, 728,000 shares at $1 par ...... 728,000 Paid-in capital excess of par, preferred........ 2,900,000 Paid-in capital excess of par, common......... 5,148,000 Retained earnings........................................... 9,800,000 Treasury stock, at cost; 8,000 common shares (88,000) Total shareholders equity.............................. $17,688,000

During 2013, several events and transactions affected the retained earnings of MDS.

Required:

1. Prepare the appropriate entries for these events.

a. On February 20, the board of directors declared a property dividend of 100,000 shares of Brown International common stock that MDS had been purchased in January as an investment (book value: $485,000). The investment shares had a fair market value of $5 per share and were distributed March 20 to shareholders of record February 28.

b. On April 4, a 5 for 4 stock split was declared and distributed. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $12 per share.

c. On July 25, a 3% common stock dividend was declared and distributed. The market value of the common stock was $12 per share.

d. On December 2, the board of directors declared the 7.6% cash dividend on the 100,000 preferred shares, payable on December 27 to shareholders of record December 19.

e. On December 2, the board of directors declared a cash dividend of $.50 per share on its common shares, payable on December 27 to shareholders of record December 19.

2. Prepare the shareholders' equity section of the balance sheet for MDS, Inc. for the year ended at December 31, 2013. Net income for the year was $900,000.