Nav-Go Enterprises Inc. produces aeronautical navigation equipment. The stockholders' equity accounts of Nav-Go Enterprises Inc., with balances on January 1, 20Y3, are as follows:

Common Stock, $5 stated value (900,000 shares authorized,

620,000 shares issued) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,100,000

Paid-In Capital in Excess of Stated Value-Common Stock . . . . . . . . . . . . . . . . 1,240,000

Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,875,000

Treasury Stock (48,000 shares, at a cost of $6 per share) . . . . . . . . . . . . . . . . . . . .288,000

The following selected transactions occurred during the year:

Jan. 15. Paid cash dividends of $0.06 per share on the common stock. The dividend had been properly recorded when declared on December 1 of the preceding fiscal year for $34,320.

Mar. 15. Sold all of the treasury stock for $6.75 per share.

Apr. 13. Issued 200,000 shares of common stock for $8 per share.

June 14. Declared a 3% stock dividend on common stock, to be capitalized at the market price of the stock, which is $7.50 per share.

July 16. Issued the certificates for the dividend declared on June 14.

Oct. 30. Purchased 50,000 shares of treasury stock for $6 per share.

Dec. 30. Declared a $0.08-per-share dividend on common stock.

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, 20Y3.

4. Prepare the Stockholders' Equity section of the December 31, 20Y3, balance sheet

Using Method 1 of Exhibit 8.

Exhibit 8: Stockholders' Equity Section of a Balance Sheet

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Telex Inc. Balance Sheet December 31, 20Y7 Stockholders'Equity Paid-in capital: Preferred 10% stock, $50 par (2,000 shares authorized and Excess over par Common stock, $20 par (50,000 shares authorized, 100,000 10,000 Paid-in capital, preferred stock. 110,000 $900,000 45,000 shares issued) Excess over par 11,090,000 190,000 Method 1 Paid-in capital, common stock... From sale of treasury stock. Total paid-in capital $1,202,000 350,000 $1,552,000 (27,000) $1,525,000 Retained earnings Total Total stockholders'equity Stockholders'Equity Contributed capital: Preferred 10% stock, $50 par (2,000 shares authorized and 100,000 Common stock, $20 par (50,000 shares authorized 45,000 shares issued)… Additional paid-in capital... 900,000 202,000 Method2 Total contributed capital $1,202,000 Retained earnings Total $1,552,000 (27,000) $1,525,000 Treasury stock (600 shares at cost) Total stockholders' equity