Question

Alexander Corporation reports the following components of stockholders’ equity on December 31, 2015:

Common stock—$25 par value, 60,000 shares authorized, 36,000 shares issued and outstanding		$	900,000
Paid-in capital in excess of par value, common stock			72,000
Retained earnings			361,000
Total stockholders’ equity		$	1,333,000

In year 2016, the following transactions affected its stockholders’ equity accounts.

Jan.	2	Purchased 3,600 shares of its own stock at $25 cash per share.
Jan.	7	Directors declared a $1.50 per share cash dividend payable on Feb. 28 to the Feb. 9 stockholders of record.
Feb.	28	Paid the dividend declared on January 7.
July	9	Sold 1,440 of its treasury shares at $30 cash per share.
Aug.	27	Sold 1,800 of its treasury shares at $20 cash per share.
Sept.	9	Directors declared a $2 per share cash dividend payable on October 22 to the September 23 stockholders of record.
Oct.	22	Paid the dividend declared on September 9.
Dec.	31	Closed the $58,000 credit balance (from net income) in the Income Summary account to Retained Earnings.

Required:
1.	Prepare journal entries to record each of these transactions for 2016.

2.	Prepare a statement of retained earnings for the year ended December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.)

3.	Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.)