[The following information applies to the questions displayed below.] Incentive Corporation was authorized to issue 12,000 shares of common stock, each with a $2 par value. During its first year, the following selected transactions were completed:

1. Issued 6,900 shares of common stock for cash at $29 per share.
2. Issued 2,900 shares of common stock for cash at $32 per share.

Required:

1. Complete the table below, indicating the account, amount, and direction of the effect for the above transactions.

3. Prepare the stockholders equity section as it should be reported on the year-end balance sheet. At year-end, the accounts reflected net income of $100.

4. Incentive Corporation has $39,000 in the companys bank account. At year-end, the accounts reflected a profit of $100. What is the maximum amount of cash dividends the company can declare and distribute?

Stockholders' Equity Assets Liabilities INCENTIVE CORPORATION Balance Sheet (Partial) At December 31 Stockholders' Equity Contributed Capital Common Stock Additional Paid-in Capital, Common Stock Total Contributed Capital 0 Retained Earnings $ Total Stockholders' Equity 0