On January 1, 2014, Hammond Inc. had the following shareholders’ equity balances.
|
Common Stock, no-par value (1,000,000 shares issued) |
$3,000,000 |
|
Common Stock Dividends Distributable |
400,000 |
|
Retained Earnings |
1,200,000 |
During 2014, the following transactions and events occurred.
- Issued 100,000 shares of common stock as a result of a 10% stock dividend declared on December 15, 2013.
- Issued 60,000 shares of common stock for cash at $5 per share.
- Corrected an error that had understated the net income for 2012 by $140,000.
- Declared and paid a cash dividend of $300,000.
- Earned net income of $600,000.
Instructions
Prepare the stockholders’ equity section of the balance sheet at December 31, 2014.