Recording and reporting treasury stock transactions
Millsaps Corp. completed the following transactions in 2010, the first year of operation.
1. Issued 30,000 shares of $10 par common stock at par.
2. Issued 2,000 shares of $30 stated value preferred stock at $33 per share.
3. Purchased 1,000 shares of common stock as treasury stock for $12 per share.
4. Declared a 5 percent dividend on preferred stock.
5. Sold 300 shares of treasury stock for $15 per share.
6. Paid the cash dividend on preferred stock that was declared in Event 4.
7. Earned cash service revenue of $75,000 and incurred cash operating expenses of $42,000.
8. Appropriated $6,000 of retained earnings.
Required
a. Organize the transaction in accounts under an accounting equation.
b. Prepare the stockholders’ equity section of the balance sheet as of December 31, 2010.