I.Stockholders’ EquitySome of the account balances of Mali Company at December 31, 20×0 are shown below:20,0003,000Common Stock ($10 par, 100,000 shares authorized)500,000PCIEP, Common100,000Retained Earnings304,0005,500Treasury Stock-Common (1,000 shares at cost) 16,000The price of the company’s common stock has been increasing steadily on the market; it was $21 on January 1, 20×1, advanced to $24 by July 1, and to $27 at the end of the year 20×1. The preferred stock was not openly traded, but was appraised at $120 per share during 20×1.1)Give the proper journal entries for each of the following occurred in 20×1:(a)The company declared a property dividend on April 1. Each common stockholder was to receive one share of Washington for every 10 shares outstanding. Mali had 8,000 shares of Washington (2% of total outstanding stock) which was purchased a few weeks ago for $68,400. The market value of Washington stock was $16 per share on April 1. Record appreciation only on the shares distributed.(b)The company resold the 50 shares of preferred stock held in the treasury for $116 per share.(c)On July 1, the company declared a 5% stock dividend to the common stockholders.(d)On October 1, the company incurred a fire loss of $7,000 to its warehouse (ordinary loss).(e)On October 15, the company declared a cash dividend of $100,000. Assume the preferred stock is non-cumulative.2) Prepare the stockholders’ equity section of the balance sheet at December 31, 20×1
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