Question:
Alexander Corporation reports the following components of stockholders’ equity on December 31, 2016:
Common stock—\(25 par value, 50,000 shares authorized,
30,000 shares issued and outstanding . . . . . . . . . . . . . . . . . . . . . . . . \) 750,000
Paid-in capital in excess of par value, common stock . . . . . . . . . . . . . . . 50,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340,000
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \(1,140,000
In year 2017, the following transactions affected its stockholders’ equity accounts.
Jan. 2 Purchased 3,000 shares of its own stock at \)25 cash per share.
Jan. 7 Directors declared a \(1.50 per share cash dividend payable on February 28 to the February 9 stockholders of record.
Feb. 28 Paid the dividend declared on January 7.
July 9 Sold 1,200 of its treasury shares at \)30 cash per share.
Aug. 27 Sold 1,500 of its treasury shares at \(20 cash per share.
Sep. 9 Directors declared a \)2 per share cash dividend payable on October 22 to the September 23 stockholders of record.
Oct. 22 Paid the dividend declared on September 9.
Dec. 31 Closed the $52,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
Required
1. Prepare journal entries to record each of these transactions for 2017.
2. Prepare a statement of retained earnings for the year ended December 31, 2017.
3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2017.
