The stockholders' equity section of the balance sheet of Pittman Corporation as of December 31, 20x7, was as follows:
Contributed capital
Common stock, $4 par value, 500,000 shares authorized,
200,000 shares issued and outstanding...................................... $ 800,000
Additional paid-in capital..................................................... 1,000,000
Total contributed capital..................................................... $1,800,000
Retained earnings.............................................................. 1,200,000
Total stockholders' equity................................................... $3,000,000
Pittman Corporation had the following transactions in 20x8:
Feb. 28 The board of directors declared a 10 percent stock dividend to stockholders of record on March 25 to be distributed on April 5. The market value on this date is $16.
Mar. 25 Date of record for stock dividend.
Apr. 5 Issued stock dividend.
Aug. 3 Declared a 2-for-1 stock split.
Nov. 20 Purchased 18,000 shares of the company's common stock at $8 per share for the treasury.
Dec. 31 Declared a 5 percent stock dividend to stockholders of record on January 25 to be distributed on February 5. The market value per share was $9.
Required
1. Record the stockholders' equity components of the transactions for Pittman Corporation in T accounts.
2. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 20x8. Assume net income for 20x8 is $108,000.
3. User Insight: If you owned 1,000 shares of Pittman stock on February 1, 20x8, how many shares would you own February 5, 20x9? Would your proportionate share of the ownership of the company be different on the latter date than it was on the former date? Explain your answer.