calculate the payout ratio and return on common stockholders rsquo equity ratio 575625

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

Common Stock ($20 par value, 90,000 shares issued and outstanding)	$1,800,000
Paid in Capital in Excess of Par Value	240,000
Retained Earnings	750,000

During the year, the following transactions occurred.

	1	Declared a $0.50 cash dividend per share to stockholders of record on February 15, payable March 1.
	1	Paid the dividend declared in February.
July	1	Declared a 10% stock dividend to stockholders of record on July 15, distributable July 31. On July 1 the market price of the stock was $26 per share.
July	31	Issued the shares for the stock dividend.
	1	Declared a $1 per share dividend to stockholders of record on December 15, payable January 5, 2011.
	31	Determined that net income for the year was $500,000. The market price of the common stock on this date was $32.

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.