Ruffalo Enterprises Inc. produces aeronautical navigation equipment. The stockholders’ equity accounts of Ruffalo Enterprises Inc., with balances on January 1, 2012, are as follows:

Common Stock, $8 stated value (250,000 shares authorized,
175,000 shares issued).................... $1,400,000
Paid-In Capital in Excess of Stated Value............. 700,000
Retained Earnings....................... 1,840,000
Treasury Stock (40,000 shares, at cost).............. 400,000

The following selected transactions occurred during the year:
Jan. 9. Paid cash dividends of $0.10 per share on the common stock. The dividend had been properly recorded when declared on November 30 of the preceding fiscal year for $13,500.
Mar 15. Sold all of the treasury stock for $540,000.
May 13. Issued 50,000 shares of common stock for $680,000.
June 14. Declared a 2% stock dividend on common stock, to be capitalized at the market price of the stock, which is $15 per share.
July 16. Issued the certificates for the dividend declared on June 14.
Oct 30. Purchased 25,000 shares of treasury stock for $320,000.
Dec 30. Declared a $0.12-per-share dividend on common stock.
31. Closed the credit balance of the income summary account, $775,000.
31. Closed the two dividends accounts to Retained Earnings.
Instructions
1. Enter the January 1 balances in T accounts for the stockholders’ equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from sale of Treasury Stock; stock Dividends Distributable; Stock Dividends; Cash Dividends.
2. Journalize the entries to record the transactions, and post to the eight selected accounts.
3. Prepare a retained earnings statement for the year ended December 31, 2012.
4. Prepare the Stockholders’ Equity section of the December 31, 2012, balance sheet.