Sigma Corporation

The stockholders' equity accounts of Sigma Corporation on January 1, 2010, were as follows. 
Preferred Stock (8%, $100 par noncumulative, 5,200 shares authorized) $312,000 
Common Stock ($5 stated value, 307,000 shares authorized) 1,068,000 
Paid-in Capital in Excess of Par Value - Preferred Stock 18,370 
Paid-in Capital in Excess of Stated Value - Common Stock 484,010 
Retained Earnings 691,840 
Treasury Stock - Common (5,200 shares) 41,600 
During 2010 the corporation had these transactions and events pertaining to its stockholders' equity. 
Feb. 1 Issued 5,200 shares of common stock for $31,200. 
Mar. 20 Purchased 1,090 additional shares of common treasury stock at $9 per share. 
Oct. 1 Declared a 8% cash dividend on preferred stock, payable November 1. 
Nov. 1 Paid the dividend declared on October 1. 
Dec. 1 Declared a $0.70 per share cash dividend to common stockholders of record on December 15, payable December 31, 2010. 
Dec. 31 Determined that net income for the year was $281,152. Paid the dividend declared on December 1. 

Journalize the transactions. (Include entries to close net income to Retained Earnings. List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

Date Account/Description Debit Credit 
Feb. 1 Cash 31200 
Common Stock 26000 
Paid-in Capital in Excess of Stated Value-Common Stock 5200 
Mar. 20 Treasury Stock 9810 
Cash 
Oct. 1 Cash Dividends 24960 
Dividends Payable 24960 
Nov. 1 Dividends Payable 24960 
Cash 24960 
Dec. 1 Cash Dividends 
Dividends Payable 
Dec. 31 Income Summary 
Retained Earnings 
(To close income summary) 
Retained Earnings 
Cash Dividends 
(To close dividends) 
Dividends Payable 
Cash 
(To pay dividends) 

Enter the beginning balances in the accounts and post the journal entries to the stockholders' equity accounts. (Use T accounts.) (If answer is zero please enter 0, do not leave any fields blank.)

Preferred Stock Paid-in Cap. in Excess of Par Value - Pref. Stock 
1/1
1/1

1/1
1/1


12/31 Bal. 12/31 Bal. 12/31 Bal. 12/31 Bal. 

Common Stock
Paid-in Cap. in Exc. of Stated Value - Comm. Stock

1/1 Bal. 1/1 Bal. 1/1 Bal. 1/1 Bal. 
2/1
2/1

2/1
2/1


12/31 Bal. 12/31 Bal. 12/31 Bal. 12/31 Bal. 

Retained Earnings
Treasury Stock - Common

12/31 1/1 Bal. 1/1 Bal. 1/1 Bal. 
12/31
12/31

3/20
3/20


12/31 Bal. 12/31 Bal. 12/31 Bal. 12/31 Bal. 

Cash Dividends

10/1 10/1 
12/1
12/31


12/31 Bal. 12/31 Bal. 

Complete the stockholders’ equity section of the balance sheet at December 31, 2010 below. (If amount should be deducted please put either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45).)

SIGMA CORPORATION 
Partial Balance Sheet 
December 31, 2010

Stockholders’ equity 
Paid-in capital 
Capital stock 
Treasury stock8% Preferred stockIn excess of par value-preferred stockRetained earningsCommon stockIn excess of stated value-common stock, 
$100 par value, noncumulative, 
shares authorized, 
shares issued and outstanding $ 
In excess of par value-preferred stockTreasury stockIn excess of stated value-common stockRetained earningsCommon stock8% Preferred stock, 
no par, $5 stated value 
shares authorized, 
shares issued 
and shares outstanding 

Total capital stock $ 
Additional paid-in capital 
Treasury stock8% Preferred stockCommon stockIn excess of stated value-common stockRetained earningsIn excess of par value-preferred stock 
Retained earningsTreasury stockCommon stockIn excess of stated value-common stock8% Preferred stockIn excess of par value-preferred stock 

Total additional paid-in capital 

Total paid-in capital 
In excess of stated value-common stockTreasury stockRetained earningsCommon stockIn excess of par value-preferred stock8% Preferred stock 

Total paid-in capital and retained earnings 
Less: 8% Preferred stockRetained earningsTreasury stockCommon stockIn excess of par value-preferred stockIn excess of stated value-common stock 
( common shares) 

Total Stockholders’ Equity $

Calculate the payout ratio, earnings per share, and return on common stockholders’ equity ratio. (Note: Use the common shares outstanding on January 1 and December 31 to determine average shares outstanding.) (Round all ratios to 1 decimal place, e.g. 25.5 and earnings per share to 2 decimal places, e.g. 2.25.)

Payout ratio % 
Earnings per share $ 
Return on common stockholders' equity %