Dawls Corporation Reported Stockholders' Equity on December 31 of the Prior

Essay

Dawls Corporation reported stockholders' equity on December 31 of the prior year as follows:
$\begin{array}{|l|r|}\hline\begin{array}{l}\text { Common stock, } \$ 5 \text { par value, } 1,000,000 \text { shares authorized, } 500,000 \text { shares } \\\text { issued }\end{array} & \$ 2,500,000 \\\hline \text { Contributed capital in excess of par, common stock } & 1,000,000 \\\hline \text { Retained earnings } & 3,000,000\\\hline\end{array}$

The following selected transactions occurred during the current year:
$\begin{array}{|l|l|}\hline \text { Feb. 15 } & \begin{array}{l}\text { The board of directors declared a 5\% stock dividend to stockholders of record on } \\\text { March 1, payable March 20. The stock was selling for } \$ 8 \text { per share. }\end{array} \\\hline \text { Mar. 9 } & \text { Paid the stock dividend. } \\\hline \text { May 1 } & \begin{array}{l}\text { A cash dividend of } \$ 0.30 \text { per share was declared by the board of directors to } \\\text { stockholders of record on May 20, payable June 1. }\end{array} \\\hline \text { June 1 } & \text { Paid the cash dividend. } \\\hline \text { Aug . 20 } & \text { The board decided to split the stock 4-for-1, effective on September 1. } \\\hline \text { Sept. 1 } & \text { Stock split 4-for-1. } \\\hline \text { Dec. 31 } & \text { Earned a net income of } \$ 800,000 \text { for the current year. }\\\hline \end{array}$
Prepare a statement of retained earnings as of December 31 of the current year.