The balance sheet of Mundo Foods, at December 31, 2011, reported 90,000 shares of no-par common stock authorized with 50,000 shares issued and a common stock balance of $170,000. Retained Earnings had a balance $140,000. During 2012 the company completed the following selected transactions:
March 15 - Purchased 9,000 shares of treasury stock at $7 per share.
April 30 - Distributed a 10% stock dividend on the outstanding shares of common stock. The market value of common stock was $10 per share.
Dec 31 - Earned net income of $105,000 during the year. Closed net income to Retained Earnings.
Requirements
1. Record the transactions in the general journal. Explanations are not required.
2. Prepare the stockholders' equity section of Mundo Health Food's balance sheet at December 31, 2012.