Common stock — $26 par value, 48,000 shares authorized,

Common stock—$26 par value, 48,000 shares authorized,
38,000 shares issued and outstanding $ 988,000
Paid-in capital in excess of par value, common stock 60,000
Retained earnings 260,000

Total stockholders’ equity $ 1,308,000

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

Jan. 2
Purchased 3,200 shares of its own stock at $26 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 $31 cash per share.
Aug. 27 Sold 2,700 of its treasury shares at $24 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 $12,000 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. (Omit the “$” sign in your response.)

Jan. 2

Jan. 7

Feb. 28

July 9

Aug. 27

Sept. 9

Oct. 22

Dec. 31

2. Prepare a statement of retained earnings for the year ended December 31, 2012. (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

KROLL CORPORATION
Statement of Retained Earnings
For Year Ended December 31, 2012
$

$

3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2012. (Omit the “$” sign in your response.)

KROLL CORPORATION
Stockholders’ Equity Section of the Balance Sheet
December 31, 2012
$

Total stockholders’ equity $