Exercise $18-23($Algo$)$ Transactions affecting retained earnings $[$LO$18-6,18-7,18-8]$

The balance sheet of Consolidated Paper, Inc., included the following shareholders$$ equity accounts at December $31,2020$:

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$$Paid$-$in capital:$$Preferred stock, $9\mathrm{.}0\%,86,000$ shares at $$1$ par$$86,000$Common stock, $363,600$ shares at $$1$ par$363,600$Paid$-$in capital$$excess of par, preferred$1,485,000$Paid$-$in capital$$excess of par, common$2,535,000$Retained earnings$8,645,000$Treasury stock, at cost; $3,600$ common shares$(43,200)$Total shareholders' equity$$13,071,400$

During $2021,$ several events and transactions affected the retained earnings of Consolidated Paper.

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Required:

$1.$ Prepare the appropriate entries for these events.

On March $3,$ the board of directors declared a property dividend of $230,000$ shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment $($book value: $$674,000).$ The investment shares had a fair value of $$3$ per share and were distributed March $31$ to shareholders of record March $15.$

On May $3,$ a $5-$for$-4$ stock split was declared and distributed. The stock split was effected in the form of a $25\%$ stock dividend. The market value of the $$1$ par common stock was $$12$ per share.

On July $5,$ a $2\%$ common stock dividend was declared and distributed. The market value of the common stock was $$12$ per share.

On December $1,$ the board of directors declared the $9\mathrm{.}0\%$ cash dividend on the $86,000$ preferred shares, payable on December $28$ to shareholders of record December $20.$

On December $1,$ the board of directors declared a cash dividend of $$0\mathrm{.}40$ per share on its common shares, payable on December $28$ to shareholders of record December $20.$

$2.$ Prepare the shareholders' equity section of the balance sheet for Consolidated Paper, Inc., at December $31,2021.$ Net income for the year was $$760,000.$

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