The annual report for Malibu Beachwear reported the following transactions affecting stockholders’ equity: a. Purchased $351,300 of common stock now held in treasury.
b. Declared cash dividends in the amount of $260,650.
c. Paid the dividends in (b).
d. Issued 113,000 new shares of $0.10 par value common shares for $2 per share.
e. Closed the Dividends account.
1. Indicate the effect (+ for increase, − for decrease, +/− for increase/decrease) of each of these transactions on total assets, liabilities, and stockholders’ equity.
2. Prepare journal entries to record each of these events.
3. Prepare a statement of stockholders’ equity, assuming the following opening balances.