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kroll corporation reports the following components of stockholders equity on decembe 648046

Kroll Corporation reports the following components of stockholders’ equity on December 31, 2011.

Common stock—$25 par value, 40,000 shares authorized, 30,000 shares issued and outstanding

$ 750,000

Paid in capital in excess of par value, common stock

50,000

Retained earnings

260,000

Total stockholders’ equity

$1,060,000

In year 2012, the following transactions affected its stockholders’ equity accounts.

Jan. 2 Purchased 2,000 shares of its own stock at $25 cash per share.

Jan. 7 Directors declared a $2 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 500 of its treasury shares at $30 cash per share.

Aug. 27 Sold 1,500 of its treasury shares at $23 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 $8,000 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.

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