This is one comprehensive problem that I have divided into three parts to facilitate step-by-step learning. Each case provides additional information to learn accounting and financial treatment of the new transactions. Thus, when working on Case 2, the facts presented in Case 1 also apply. Likewise, when working on Case 3, the facts presented in Case 1 and Case 2 also apply.

Case 1: In late 2015, the DiCapua Corporation was incorporated. The corporate charter authorizes the issuance of 5,000,000 shares of common stock carrying a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. During the 1st quarter of 2016 (months of January, February, and March), the DiCapua Corporation entered into the following transactions relating to its stockholders equity: a. On January 2, 2016, 3,000,000 shares of the common stock are issued (as part of an initial public offering) in exchange for cash at a price of $10 per share. b. On January 2, all of the 1,000,000 shares of preferred stock are issued in exchange for cash at a price of $20 per share. Required: 1. Prepare the necessary journal entries to record these transactions in the books of DiCapua Corporation. Assess the impact of each transaction on the accounting equation. 2. Prepare the shareholders' equity section of the DiCapua Corporations balance sheet at the end of the 1st quarter (as of March 31, 2016). Assume net income for the first quarter 2016 was $1,000,000.

Case 2: During the 2 nd quarter (months of April, May and June) of 2016, the DiCapua Corporation entered into the following transactions relating to its stockholders equity: a. On April 30, 2016, the corporation reacquired 200,000 shares of its common stock at a price of $12 per share from the open market. b. On May 31, 2016, 50,000 treasury shares are reissued at $15 per share. c. On June 30, 2016, 50,000 treasury shares are reissued at $10 per share. Required: 1. Prepare the necessary journal entries to record these transactions in the books of DiCapua Corporation. Assess the impact of each transaction on the accounting equation. 2. Prepare the shareholders' equity section of the DiCapua Corporations balance sheet at the end of the 2nd quarter (as of June 30, 2016). Assume net income for the second quarter was $3,000,000.

Case 3: During the 4th quarter of 2016 (months of October, November and December), the DiCapua Corporation entered into the following transactions relating to its stockholders equity: a. On October 1, 2016, DiCapua Corporation declared a 2-for-1 split for its common stock. b. On November 1, 2016, DiCapua Corporation declared a $0.10 per share cash dividend on common stock and a $0.20 per share cash dividend on preferred stock. Payment to holders of common and preferred stock is scheduled for December 1, 2016, to shareholders of record on November 15, 2016. c. On December 2, 2016, the DiCapua Corporation declares a 1% stock dividend payable on December 28, 2016, to common shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $10 per share.

Required: 1. Prepare the necessary journal entries to record these transactions in the books of DiCapua Corporation. 2. Prepare the December 31, 2016, shareholders' equity section of the balance sheet for the DiCapua Corporation. Assume net income for the fourth quarter was $2,500,000. 3. Compute earnings per share (EPS) and return on equity (ROE) for DiCapua Corporation for the fiscal year ending on December 31, 2016. 4. Prepare a complete statement of shareholders' equity for DiCapua Corporation for the fiscal year ending on December 31, 2016