On January 1, 2014 Everett Corporation had these stockholders' equity accounts.

Common Stock ($10 par value, 70,000 shares issued and outstanding) 700,000

Paid-in Capital in Excess of Par Value 500,000

Retained Earnings 620,000

During the year, the following transactions occurred.

Jan. 15 Declared a $0.50 cash dividend per share to stockholders of record on January 31, payable February 15.

Feb. 15 Paid the dividend declared in January

Apr. 15 Declared a 10% stock dividend to stockholders of record on April 30, distributable May 15. On April 15, the

market price of the stock was $14 per share.

May 15 Issued the shares for the stock dividend.

Dec. 1 Declared a $0.60 per share cash dividend to stockholders of record on Dec. 15, payable Jan 10, 2015.

Dec. 31 Determined that net income for the year was $400,000.

Instructions:

(a) Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.)

(b) Enter the beginning balances and post the entries to the stockholders' equity T-accounts. (Note: Open additional stockholders' equity accounts as needed.)

(c) Prepare the stockholders' equity section of the balance sheet at Dec. 31

(d) Calculate the payout ratio and return on common stockholders' equity.