Problem #3 — Entries for selected corporate transactionsBat

Problem #3 — Entries for selected corporate transactionsBath ‘n More Inc. manufactures bathroom fixtures. The stockholders’equity accounts of Bath ‘n More Inc., with balances on January 1, 2012, are asfollows:Common Stock, $10 stated value (600,000 sharesauthorized, 400,000 shares issued) $4,000,000Paid-In Capital in Excess of Stated Value   750,000Retained Earnings   9,150,000Treasury Stock (40,000 shares, at cost)   600,000The following selected transactions occurred during the year:Jan.4.   Paid cash dividends of $0.13 pershare on the common stock. The dividend had been properly recorded whendeclared on December 1 of the preceding fiscal year for $46,800.Apr.3.   Issued 75,000 shares of commonstock for $1,200,000.June6.   Sold all of the treasury stock for$725,000.July1.   Declared a 4% stock dividend oncommon stock, to be capitalized at the market price of the stock, which is $18per share.Aug.15.   Issued the certificates for thedividend declared on July 1.Nov.10.   Purchased 25,000 shares of treasurystock for $500,000.Dec.27.   Declared a $0.16-per-share dividendon common stock.31.  Closed the credit balance ofthe income summary account, $950,000.31.  Closed the two dividendsaccounts to Retained Earnings.Instructions1. Enter the January 1 balances in T accounts forthe stockholders’ equity accounts listed. Also prepare T accounts for thefollowing: Paid-In Capital from Sale of Treasury Stock; Stock DividendsDistributable; Stock Dividends; Cash Dividends.2. Journalize the entries to record thetransactions, and post to the eight selected accounts.3. Prepare a retained earnings statement for theyear ended December 31, 2012.4. Prepare the Stockholders’ Equity section of theDecember 31, 2012, balance sheet.