Morrow enterprises inc. manufactures bathroom fixtures. the stockholders’ equity accounts of morrow enterprises inc., with balances on january 1, 2016, are as follows:

The answer is: Jan. 7. Paid cash dividends of $0.18 per share on the common stock. The dividend had been properly recorded when declared on Nov 30 of the preceding fiscal year for $66,600. 
Dr Common Dividends Payable 66,000 
Cr Cash 66,000 

Feb. 9. Issued 50,000 shares of common stock for $600,000 
Dr Cash 600,000 
Cr Common Stock 400,000 (50,000 x $8 par value) 
Cr Additional Paid-In Capital 200,000 

May 21. Sold all of the treasury stock for $300,000 
Dr Cash 300,000 
Cr Common (Treasury) Stock 240,000 
Cr Additional Paid-In Capital 60,000 

July 1. Declared a 4% stock dividend on common stock, to be capitalized at the market price of the stock, which is $13 per share. 
400,000 - 30,000 + 50,000 + 30,000 = 450,000 shares outstanding 
Dr Stock Dividends 234,000 (450,000 x 4% x $13 market price) 
Cr Stock Dividends Distributable 144,000 (450,000 x 4% x 8 par value) 
Cr Additional Paid-In Capital 90,000 (450,000 x 4% x 5 excess of par value) 

Aug. 15. Issued the certificates for the dividend declared on July 1 
Dr Stock Dividends Distributable 144,000 
Cr Common Stock 144,000 

Sept. 30. Purchased 10,000 shares of treasury stock for $100,000. 
Dr Common (Treasury) Stock 100,000 
Cr Cash 100,000 

Dec 27. Declared a $0.20-per-share dividend on common stock 
400,000 - 30,000 + 50,000 + 30,000 +18,000 - 10,000 = 458,000 shares now outstanding 
Dr Cash Dividends 91,600 (458,000 x $0.20) 
Cr Common Dividends Payable 91,600 

31. Closed the credit balance of the income summary account, $485,000. 
Dr Income Summary 485,000 
Cr Retained Earnings 485,000 

31. Closed the two dividends accounts to Retained Earnings. 
Dr Retained Earnings 234,000 
Cr Stock Dividends 234,000 

Dr Retained Earnings 91,000 
Cr Cash Dividends 91,000 

3) 
7,100,000 Beginning balance 
+ 485,000 
- 234.000 
- 91,000 
= 7,260,000 Ending balance 

4) 
3,824,000 Common Stock (468,000 x 8) 
+ 950,000 Additional Paid-In Capital (600,000 + 200,000 + 60,000 + 90,000) 
+ 7,260,000 Retained Earnings 
- 100,000 Treasury Stock 
= 11,934,000 Total Stockholders' Equity