Acc280 Financial Accounting: AP11-2A The stockholders' equity accounts of Sigma Corporation

Acc280 Financial Accounting
AP11-2A
The stockholders' equity accounts of Sigma Corporation on January 1, 2010, were as follows.
Preferred Stock (8%, $100 par noncumulative, 5,200 shares authorized) 312,000
Common Stock ($5 stated value, 307,000 shares authorized) 1,068,000
Paid-in Capital in Excess of Par Value-Preferred Stock 18,370
Paid-in Capital in Excess of Stated Value-Common Stock 484,010
Retained Earnings 691,840
Treasury Stock-Common (5,200 shares) 41,600

During 2010 the corporation had the following transactions and events pertaining to its stockholders' equity.
Feb. 1 Issued 5,200 shares of common stock for $31,200.
Mar. 20 Purchased 1,090 additional shares of common treasury stock at $9 per share.
Oct. 1 Declared an 8% cash dividend on preferred stock, payable November 1.
Nov. 1 Paid the dividend declared on October 1.
Dec. 1 Declared a $0.70 per share cash dividend to common stockholders of record on December 15, payable December 31, 2010.
Dec 31 Determined that net income for the year was $281,152. Paid the dividend declared on December 1.

Instructions
(a) Journalize the transactions. (Include entries to close net income to Retained Earnings. List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)
(b) Enter the beginning balances in the accounts and post the journal entries to the stockholders' equity accounts. (Use T accounts.)
(c) Prepare the stockholders' equity section of the balance sheet at December 31, 2010.
(d) Calculate the payout ratio, earnings per share, and return on common stockholders' equity ratio. (Note: Use the common shares outstanding on January 1 and December 31 to determine the average shares outstanding.)
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