Response to the following problem:
Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $.01 par value common. As of the beginning of 2012, 230 shares of preferred stock and 2,480 shares of common stock have been issued. The following transactions affect stockholders' equity during 2012:
Mar. 1 Issues 1,200 shares of common stock for $36 per share.
May 15 Repurchases 530 shares of treasury stock for $27 per share.
Jul. 10 Reissues 90 shares of treasury stock purchased on May 15 for $31 per share.
Oct. 15 Issues 150 shares of preferred stock for $39 per share.
Dec. 1 Declares a cash dividend on both common and preferred stock of $.60 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.)
Dec. 31 Pays the cash dividends declared on December 1.
Donnie Hilfiger has the following beginning balances in its stockholders' equity accounts on January 1, 2012: Preferred Stock, $230; common Stock, $24.80; Additional Paid-in Capital, $75,000; and Retained Earnings, $25,500. Net income for the year ended December 31, 2012, is $9,200.