The stockholders” equity of Acorn Company as of 2008 December 31, consisted of 20,000 shares of authorized, issued, and outstanding USD 50 par value common stock, paid-in capital in excess of par of USD 240,000, and retained earnings of USD 400,000. Following are selected transactions for 2009:
May 1 Acquired 3,000 shares of its own common stock at USD 100 per share.
June 1 Reissued 500 shares at USD 120.
30 Reissued 700 shares at USD 90.
Oct. 1 Declared a cash dividend of USD 5 per share.
31 Paid the cash dividend declared on October 1.
Net income for the year was USD 80,000. No other transactions affecting retained earnings occurred during the year.
a. Prepare general journal entries for these transactions.
b. Prepare the stockholders” equity section of the 2009 December 31, balance sheet.