The balance sheet of Morrisey Management Consulting, Inc. at December 31, 2015, reported the following stockholders’ equity:
Stockholders' Equity
Paid-In Capital:
Common Stock—$10 Par Value; 300,000 shares authorized, 25,000 shares issued and outstanding ................$ 250,000
Paid-In Capital in Excess of Par—Common.... 320,000
Total Paid-In Capital............. 570,000
Retained Earnings............. 158,000
Total Stockholders' Equity.........$ 728,000
During 2016, Morrisey completed the following selected transactions:
Feb. 6 Declared a 15% stock dividend on common stock. The market value of Morrisey's stock was $23 per share.
15 Distributed the stock dividend.
Jul. 29 Purchased 2,100 shares of treasury stock at $23 per share.
Nov. 27 Declared a $0.20 per share cash dividend on the common stock outstanding.
Requirements
1. Record the transactions in the general journal.
2. Prepare a retained earnings statement for the year ended December 31, 2016. Assume Morrisey’s net income for the year was $86,000.
3. Prepare the stockholders’ equity section of the balance sheet at December 31, 2016.