(Learning Objectives 2, 3, 4: Reconstructing transactions from the fi nancial statements) D-4 Networking Solutions began operations on January 1, 20X6, and immediately issued its shares, receiving cash. D-4’s balance sheet at December 31, 20X6, reported the following shareholders’ equity:

During 20X6, D-4

a. Issued shares for $3 per share.

b. Purchased 950 shares of treasury shares, paying $9 per share.

c. Resold some of the treasury shares.

d. Earned net income of $58,000 and declared and paid cash dividends. Revenues were

$172,000 and expenses totaled $114,000.

❙ Requirement 1. Journalize all of D-4’s shareholders’ equity transactions during the year. D-4’s entry to close net income to Retained Earnings was: