Reference no: EM132608631

Dirk Company reported the following balances at December 31, 2016: common stock $500,000, paid-in capital in execs of par value-common stock $100,000, and retained earnings $250,000. During 2017, the following transactions affected stockholders equity.

1. Issued preferred stock with a par value of $ 125,000 for $200,000.

2. Purchased treasury stock (common) for $40,000.

3. Earned net income of $180,000.

4. Declared and paid cash dividends of $56,000.

Instructions

Question 1: Prepare the stocklnlders' equity section of Dirk Company's December 31, 2017. balance sheet.

On January 1. 2017, Eddy Corporation had retained earnings of $650,000. During the year. Eddy had the following selected transactions.

1. Declared ash dividends $120,000.

2. Corrected owrstatement of 2016 net income because of inventory error $40,000.

3. Earned net income $350,000.

4. Declared stock dividends $90,000.

Instructions

Question 2: Prepare a retained earnings statement for the year.