The Digital Systems Company was organized two years ago to take advantage of an Internet opportunity. Investors paid $12 a share for 2 million shares with a $4 par value. In the next two years, the company had earnings of $2 million and $3 million, respectively. It paid dividends of $1.2 million and $1.3 million, respectively, in those years. At the end of the first year, Digital sold another 500,000 shares of stock at $14.75 per share. Construct the equity section of Digital's balance sheet initially and at the end of its first and second years in business. An answer of $1.2 million should be entered as 1,200,000.

1. Initially

1. Common stock$ -------

2. Paid in Excess$ ---------

3. Total Equity$ --------

2.. At The End Of The First Year

1. Common stock$ --------

2. Paid in Excess$ --------

3.. Retained Earnings$ -------

7. Total Equity$ --------

At The End Of The Second Year

Common stock$ ------

Paid in Excess$ --------

Retained Earnings$ -------

Total Equity$ --------