Reference no: EM133076972

Question - The stockholders' equity accounts of Pronghorn Corp. on January 1, 2022, were as follows.

Preferred Stock (7%, $100 par noncumulative, 14,500 shares authorized) $870,000

Common Stock ($4 stated value, 870,000 shares authorized) 2,900,000

Paid-in Capital in Excess of Par Value-Preferred Stock 43,500

Paid-in Capital in Excess of Stated Value-Common Stock 1,392,000

Retained Earnings 1,995,200

Treasury Stock (14,500 common shares) 116,000

During 2022, the corporation had the following transactions and events pertaining to its stockholders' equity.

Feb. 1 Issued 14,500 shares of common stock for $87,000.

Mar. 20 Purchased 2,900 additional shares of common treasury stock at $7 per share.

Oct. 1 Declared a 7% cash dividend on preferred stock, payable November 1.

Nov. 1 Paid the dividend declared on October 1.

Dec. 1 Declared a $0.50 per share cash dividend to common stockholders of record on December 15, payable December 31, 2022.

Dec. 31 Determined that net income for the year was $810,000. Paid the dividend declared on December 1.

Required -

Part 1 - Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.)

Part 2 - Enter the beginning balances in the accounts and post the journal entries to the stockholders' equity accounts.

Part 3 - Prepare the stockholders' equity section of the balance sheet at December 31, 2022.

Part 4 - Calculate the payout ratio, earnings per share, and return on common stockholders' equity.