only answer (a) 3

and (b)

$ 300,000 Problem 1 Stone Corporation has the following capital structure at the beginning of the year: 5% Preferred stock, $50 par value, 20,000 shares authorized, 6,000 shares issued and outstanding Common stock, $10 par value, 60,000 shares authorized, 40,000 shares issued and outstanding Paid-in capital in excess of par Total paid-in capital Retained earnings Total stockholders' equity 400,000 110,000 810,000 440.000 S1.250.000 Instructions (a) Record the following transactions which occurred consecutively (show all calculations). (10 Points) 1. A total cash dividend of $90,000 was declared and payable to stockholders of record, Record dividends payable on common and preferred stock in separate accounts. 2. A 15% common stock dividend was declared. The average fair value of the common stock is $25 a share. 3. Assume that net income for the year was $160,000 (record the closing entry) and the board of directors appropriated $70,000 of retained earnings for plant expansion (b) Construct the stockholders' equity section incorporating all the above information (10 Points)