The stockholders equity section of Nielsen Corporations December 31, 2002, balance sheet is as follows: Stockholders' equity:

The stockholders’ equity section of Nielsen Corporation’s December 31, 2002, balance sheet is as follows:

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Stockholders' equity: Preferred stock (10%, $50 par, 10,000 shares authorized, 1,000 shares issued and outstanding).. Common stock ($15 par, 100,000 shares authorized, 5,000 shares issued and outstanding)... Paid-in capital in excess of par, preferred stock Paid-in capital in excess of par, common stock Total contributed capital. Retained earnings Total stockholders' equity. $ 50,000 75,000 2,000 25,000 $152,000 102,000 $254,000 During 2003, Nielsen Corporation had the following transactions affecting stockholders' equity: Jan. 20 Aug. 15 Sept. 30 Oct. 15 Nov. 1 Dec. 15 31 Paid a cash dividend of $2 per share on common stock. The dividend was declared on December 15, 2002. Reacquired 1,000 shares of common stock at $20 per share. Reissued 500 shares of treasury stock at $21 per share. Declared and paid cash dividends of $3 per share on the common stock. Reissued 200 shares of treasury stock at $18 per share. Declared and paid the 10% preferred cash dividend. Closed net income of $40,000 to Retained Earnings. (Revenues were $260,000; expenses were $220,000.) Also closed the dividends accounts to Retained Earn- ings. 1. Journalize the transactions. 2. Prepare the stockholders' equity section of Nielsen Corporation's December 31, 2003, balance sheet. 3. Interpretive Question: What is the effect on earnings per share when a company pur- chases treasury stock?