calculate the payout ratio and return on common stockholders rsquo equity ratio 575617

On January 1, 2010, Werth Corporation had these stockholders’ equity accounts.

Common Stock ($10 par value, 80,000 shares issued and outstanding)	$800,000
Paid in Capital in Excess of Par Value	500,000
Retained Earnings	620,000

During the year, the following transactions occurred.

	15	Declared a $0.50 cash dividend per share to stockholders of record on January 31, payable February 15.
	15	Paid the dividend declared in January.
	15	Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15 the market price of the stock was $14 per share.
May	15	Issued the shares for the stock dividend.
	1	Declared a $0.55 per share cash dividend to stockholders of record on December 15, payable January 10, 2011.
	31	Determined that net income for the year was $400,000.

Instructions

(a) Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.)

(b) Enter the beginning balances and post the entries to the stockholders’ equity T accounts.

(d) Calculate the payout ratio and return on common stockholders’ equity ratio.