Prepare the stockholders equity section of the balance sheet

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Problem - Knapp Industries began business on January 1, 2021 by issuing all of its 1,000,000 authorized shares of its $1 par value common stock for $40 per share. On June 30, Knapp declared a cash dividend of $2 per share to stockholders of record on July 31. Knapp paid the cash dividend on August 30. On November 1, Knapp reacquired 200,000 of its own shares of stock for $50 per share. On December 22, Knapp resold 100,000 of these shares for $60 per share.

Required -

a. Prepare all of the necessary journal entries to record the events described above.

b. Prepare the stockholders' equity section of the balance sheet as of December 31, 2021 assuming that the net income for the year was $6,000,000.

Reference no: EM133046032

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