Abel and Co. is newly established company and needs your helpfor recording corporate dividends and retained earningstransactions. The paid-in capital section of the company's balancesheet is as follows : paid-in capital preferred stock, $050 NONCUMULATIVE, NOPAR VALue, 10,000 shares authorized, 2000 issued Common stock, no par value, 100000 shares authorized, 23,930 issued Abel and Co. then has the following selected transactions duringits first year of operations. Dec. 1 Issues an additional 500 preferred shares for$2,500. April 30 Declares a semiannual dividends to the preferredstockholders of record on May 15, Payable on June 1. June 30 repurchases 750 shares of common stock issued tothe lawyer, for $500. Recall that these were originally issued for $750. The lawyerhad decided to retire and wanted to liquidate all of her assets. Oct. 31 The company has had a very successful first yearof operations. It earned revenues of $462,500 and incurred expenses of $370,000(excluding income tax).
31 Records income tax expense. ( The company has a 20%income tax rate).
31 Declares a semiannual dividends to the preferredstockholders of record on November 15, Payable on December 1.
(a) Prepare the journal entries to record the abovetransactions.
(b) Prepare the statement of retained earnings for the year.
(c) Prepare the stockholders' equity section of the balancesheet as of October 31.
(d) Prepare Closing entries.
(e) Calculate The earning per share. Assume weighted- averageshares of 23,680.