On January 1, 2010, Garcia Inc. had the following shareholders' equity balances.
Common Stock, no-par value (1,000,000 shares issued) .... $3,000,000
Common Stock Dividends Distributable .......................... 400,000
Retained Earnings ................................................. 1,200,000
During 2010, the following transactions and events occurred.
1. Issued 100,000 shares of common stock as a result of a 10% stock dividend declared on December 15, 2009.
2. Issued 60,000 shares of common stock for cash at $5 per share.
3. Corrected an error that had understated the net income for 2008 by $140,000.
4. Declared and paid a cash dividend of $300,000.
5. Earned net income of $600,000.
Instructions
Prepare the stockholders' equity section of the balance sheet at December 31, 2010.