Bovine Company, a dairy, began operations in January 2004. It issued 100,000 shares of $1 par value common stock. The stock sold for $5 per share. The company’s charter permits it to issue 250,000 shares of stock. In 2005, the company repurchased 8,000 shares of stock at a cost of $7 per share. Bovine’s net income and cash dividend payments have been as follows:
|
Year |
Net Income |
Dividends |
|
2004 |
($60,000) |
$0 |
|
2005 |
140,000 |
50,000 |
|
2006 |
220,000 |
100,000 |
Required Draft the stockholders’ equity section of Bovine’s balance sheet for the years ended December 31, 2006 and 2005.