Question: Context Corporation reports the following components of stockholders' equity on December 31, 2011.
Common stock-$10 par value, 50,000 shares authorized,
20,000 shares issued and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000
Paid-in capital in excess of par value, common stock . . . . . . . . . . . . . . . . . 30,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,000
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $365,000
In year 2012, the following transactions affected its stockholders' equity accounts. Jan. 1 Purchased 2,000 shares of its own stock at $20 cash per share. Jan. 5 Directors declared a $2 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record. Feb. 28 Paid the dividend declared on January 5. July 6 Sold 750 of its treasury shares at $24 cash per share. Aug. 22 Sold 1,250 of its treasury shares at $17 cash per share. Sept. 5 Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record. Oct. 28 Paid the dividend declared on September 5. Dec. 31 Closed the $194,000 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 2012.
2. Prepare a statement of retained earnings for the year ended December 31, 2012.
3. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2012.