Problem 13-2A Cash dividends treasury stock and statement of retained earnings L.O. C3 P2 P3[The following information applies to the questions displayed below.]Context Corporation reports the following components of stockholders’ equity on December 31 2011.Common stock—$20 par value 100 000 shares authorized 45 000 shares issued and outstanding$ 900 000Paid-in capital in excess of par value common stock 80 000Retained earnings 430 000Total stockholders’ equity $ 1 410 000In year 2012 the following transactions affected its stockholders’ equity accounts.Jan. 1 Purchased 4 500 shares of its own stock at $25 cash per share.Jan. 5 Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record.Feb. 28 Paid the dividend declared on January 5.July 6 Sold 1 688 of its treasury shares at $29 cash per share.Aug. 22 Sold 2 812 of its treasury shares at $22 cash per share.Sept. 5 Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record.Oct. 28 Paid the dividend declared on September 5.Dec. 31 Closed the $408 000 credit balance (from net income) in the Income Summary account to Retained Earnings.Problem 13-2A Part 1Required:1. Prepare journal entries to record each of these transactions for 2012. (Omit the “$” sign in your response.)Date General Journal Debit CreditJan. 1Jan. 5Feb. 28July 6Aug. 22Sept. 5Oct. 28Dec. 31Problem 13-2A Part 22. Prepare a statement of retained earnings for the year ended December 31 2012. (Amounts to be deducted should be indicated by a minus sign. Omit the “$” sign in your response.)CONTEXT CORPORATIONStatement of Retained EarningsFor Year Ended December 31 2012Retained earnings Dec. 31 2011 $Retained earnings Dec. 31 2012 $
