On January 1, 2022, Tacoma Corporation had these stockholders’ equity accounts. 

Common Stock ($10 par value, 70,000 shares issued and outstanding) .................... $700,000 

Paid-in Capital in Excess of Par Value....................500,000 

Retained Earnings....................620,000

During the year, the following transactions occurred. 

Jan. 15 Declared a $0.50 cash dividend per share to stockholders of record on January 31, payable February 15. 

Feb. 15 Paid the dividend declared in January. 

Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the market price of the stock was $14 per share. 

May 15 Issued the shares for the stock dividend. 

Dec. 1 Declared a $0.60 per share cash dividend to stockholders of record on December 15, payable January 10, 2023. 

31 Determined that net income for the year was $400,000. 

Instructions 

a. Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.) 

b. Enter the beginning balances and post the entries to the stockholders’ equity T-accounts. 

c. Prepare the stockholders’ equity section of the balance sheet at December 31. d. Calculate the payout ratio and return on common stockholders’ equity