Reference no: EM133073095

Question - Martinez Corporation has the following capital structure at the beginning of the year:

4% Preferred stock, $50 par value, 20,000 shares authorized, 6,000 shares issued and outstanding $300,000

Common stock, $10 par value, 60,000 shares authorized, 39,000 shares issued and outstanding 390,000

Paid-in capital in excess of par 120,000

Total paid-in capital 810,000

Retained earnings 437,000

Total stockholders' equity $1,247,000

Required -

(a) Record the following transactions which occurred consecutively.

1. A total cash dividend of $90,000 was declared and payable to stockholders of record. Record dividends payable on common and preferred stock in separate accounts.

2. A 15% common stock dividend was declared. The average fair value of the common stock is $24 a share.

3. Assume that net income for the year was $150,000 (record the closing entry) and the board of directors appropriated $73,000 of retained earnings for plant expansion.

(b) Construct the stockholders' equity section incorporating all the above information.