Answer:
Dawls Corporation
A Statement of Retained Earnings as of December 31 of the current year:
Retained earnings, Jan. 1 $3,000,000
Current year's net income 800,000
Stock dividend (125,000)
Cash dividend (157,500)
Retained earnings, Dec. 31 $3,517,500
Explanation:
a) Data and Calculations:
Common stock, $5 par value, 1,000,000 shares
authorized 500,000 shares issued $2,500,000
Contributed capital In excess of par, common stock 1,000,000
Retained earnings 3,000,000
Total equity $6,500,000
b) Analysis:
Feb. 15 Stock Dividends $125,000 (25,000 * $5) 25,000 shares(500,000 * 5%)
May 1 Cash Dividends $157,500 (525,000 * $0.30)
Dec. 31 Net income $800,000
c) Statement of Stockholders' Equity as of December 31
Common stock, $1.25 par value, 4,000,000 shares
authorized 2,100,000 shares issued $2,625,000
Contributed capital In excess of par, common stock 1,000,000
Retained earnings 3,517,500
Total equity $7,142,500