In: Accounting
The stockholders’ equity accounts of Martinez Corp. on January
1, 2022, were as follows.
Preferred Stock (7%, $100 par noncumulative, 10,500 shares authorized) | $630,000 | |
Common Stock ($4 stated value, 630,000 shares authorized) | 2,100,000 | |
Paid-in Capital in Excess of Par Value—Preferred Stock | 31,500 | |
Paid-in Capital in Excess of Stated Value—Common Stock | 1,008,000 | |
Retained Earnings | 1,444,800 | |
Treasury Stock (10,500 common shares) | 84,000 |
During 2022, the corporation had the following transactions and
events pertaining to its stockholders’ equity.
Feb. | 1 | Issued 10,500 shares of common stock for $63,000. | |
Mar. | 20 | Purchased 2,100 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 $588,000. Paid the dividend declared on December 1. |
Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.)
Prepare the stockholders’ equity section of the balance sheet at December 31, 2022.
Calculate the payout ratio, earnings per share, and return on
common stockholders’ equity. (Note: Use the common shares
outstanding on January 1 and December 31 to determine the average
shares outstanding.) (Round answers to 2 decimal
places, e.g. 15.25.)