Stockholders’ Equity: A Short Comprehensive Problem Early in the year Bill Sharnes and several friends organized a corporation called Sharnes Communications, Inc. The corporation was authorized to issue 50,000 shares of

Stockholders’ Equity: A Short Comprehensive Problem
Early in the year Bill Sharnes and several friends organized a corporation called Sharnes Communications, Inc. The corporation was authorized to issue 50,000 shares of $100 par value, 10 percent cumulative preferred stock and 400,000 shares of $2 par value common stock. The following transactions (among others) occurred during the year:
Instructions
a. Prepare journal entries in general journal form to record the above transactions. Include entries at December 31 to close the Income Summary account and the Dividends account.
b. Prepare the stockholders’ equity section of the Sharnes Communications, Inc., balance sheet at December 31.

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