The shareholders equity section of Rudnicki Corporation contained the following balances as of December 31, 2011:

Preferred stock (10% $10 par value, cumulative) ........ $1000

Preferred stock (12%, $10 par value, noncumulative) ...... 1500

Common stock ($1 par value, 5,000 shares authorized

3,500 issued and 400 held in treasury) .......... 3500

Additional paid-in capital:

Preferred stock (10%) .................... 1050

Preferred stock (12%) .................... 1275

Common stock ...................... 2345

Retained earnings .................... 4256

Less: Treasury stock ................... (5750)

Total shareholders equity .................. $9175

During 2012, Rudnicki Corporation entered into the following transactions affecting shareholders’ equity:

1. On May 3, the company repurchased 50 shares of its common stock in the on market at $20 per share.

2. On September 26, the company issued 200 shares of its 10 percent preferred stock at $19 per share.

3. On October 19, the company reissued 30 shares of the stock held in treasury. They sold for $22 per share; all of the shares reissued were purchased prior to May 13 for $12 per share.

4. On December 2, the company declared a cash dividend of $750, which was paid on December 27. The company has not declared a dividend since 2010. (Rudnicki Corporation uses a separate dividend account for each type of stock.)

5. On December 27, the company pays the dividend declared on December 2

6. On December 29, the company declares a 2:1 stock split on the company’s common stock.

Required

(a) Prepare the necessary entries for each transaction.

(b) Assume that Rudnicki Corporation earned net income of $899 during 2012. Prepare shareholders’ equity section as of December 31, 2012.