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The balance sheet of World Foods, at December 31, 2011, reported 100,000 shares of no-par common stock authorized, with 15,000 shares issued and a Common stock balance of $170,000. Retained earnings had a balance of $125,000. During 2012, the company completed the following selected transactions: 1) March 15-Purchased 13,000 shares of treasury stock at $5 per share. 2) April 30- Distributed a 30% stock dividend on the outstanding shares of common stock. The market value of common stock was $7 per share. 3) December 31-Earned net income of $109,000 during the year. Closed net income to Retained earnings.
REQUIREMENTS:
(1) Record the transactions in the general journal. (2) Prepare the stockholder's equity section of World Foods balance sheet at December 31, 2012.
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