At the end of 2017, Jeffco Inc. had the following equity accounts and balances:
Common shares, no par (175,000 shares issued and outstanding) $1,926,400 Retained earnings 310,000
During 2018, Jeffco engaged in the following transactions involving its equity accounts:
Issued 8,000 common shares for $35 per share.
Issued 1,000 shares of 9%, $120 stated value preferred shares at $125 per share.
Declared and paid cash dividends of $15,000.
Repurchased and cancelled 500 common shares for $52 per share.
Required:
1. Prepare the journal entries for a through d. For a compound transaction, for those boxes in which no entry is required, leave the box blank.
a. 2018 Cash Common Shares (Record issue of common shares) b. Cash Preferred Shares Contributed Surplus-Preferred Shares (Record issue of preferred shares) c. Retained Earnings (or Dividends) Cash (Record declaration and payment of dividends) d. Retained Earnings Common Shares Cash (Record repurchase of common shares)
2. Assume that 2018 net income was $89,600. Prepare a partial statement of financial position showing only the shareholders' equity section at December 31, 2018.
Jeffco, Inc. Statement of Financial Position (Partial) December 31, 2018 Shareholders' equity: Preferred shares, 9%, $120 stated value $ Common shares, no par Contributed surplus: Preferred shares Total capital stock Retained earnings Total shareholders' equity $
At the end of 2017, Jeffco Inc. had the following equity accounts and balances:
| Common shares, no par (175,000 shares issued and outstanding) | $1,926,400 |
| Retained earnings | 310,000 |
During 2018, Jeffco engaged in the following transactions involving its equity accounts:
Issued 8,000 common shares for $35 per share.
Issued 1,000 shares of 9%, $120 stated value preferred shares at $125 per share.
Declared and paid cash dividends of $15,000.
Repurchased and cancelled 500 common shares for $52 per share.
Required:
1. Prepare the journal entries for a through d. For a compound transaction, for those boxes in which no entry is required, leave the box blank.
| a. 2018 | Cash | ||
| Common Shares | |||
| (Record issue of common shares) | |||
| b. | Cash | ||
| Preferred Shares | |||
| Contributed Surplus-Preferred Shares | |||
| (Record issue of preferred shares) | |||
| c. | Retained Earnings (or Dividends) | ||
| Cash | |||
| (Record declaration and payment of dividends) | |||
| d. | Retained Earnings | ||
| Common Shares | |||
| Cash | |||
| (Record repurchase of common shares) |
2. Assume that 2018 net income was $89,600. Prepare a partial statement of financial position showing only the shareholders' equity section at December 31, 2018.
| Jeffco, Inc. | |
| Statement of Financial Position (Partial) | |
| December 31, 2018 | |
| Shareholders' equity: | |
| Preferred shares, 9%, $120 stated value | $ |
| Common shares, no par | |
| Contributed surplus: | |
| Preferred shares | |
| Total capital stock | |
| Retained earnings | |
| Total shareholders' equity | $ |
Related questions
Radko Inc. had the following transactions related to its common and preferred shares:
| January 15 | Issued 350,000 no par common shares for $15 per share. Issued 5,000 $20 stated value preferred shares at $23 per share. | |
| November 29 | Repurchased and cancelled 30,000 common shares at $21 per share. |
Required:
Prepare the journal entries for these transactions. For a compound transaction, for those boxes in which no entry is required, leave the box blank.
| Jan. 15 | Cash | ||
| Common Shares | |||
| Preferred Shares | |||
| Contributed Surplus-Preferred Shares | |||
| (Record sale of preferred and common shares) | |||
| Nov. 29 | Common Shares | ||
| Retained Earnings | |||
| Cash | |||
| (Record purchase and cancellation of common shares) |
Diamondback Welding & Fabrication Corporation sells and services pipe welding equipment in Illinois. The following selected accounts appear in the ledger of Diamondback Welding & Fabrication at the beginning of the current year:
| Preferred 2% Stock, $80 par (100,000 shares authorized, 60,000 shares issued) | $4,800,000 |
| Paid-In Capital in Excess of ParâPreferred Stock | 210,000 |
| Common Stock, $9 par (3,000,000 shares authorized, 1,750,000 shares issued) | 15,750,000 |
| Paid-In Capital in Excess of ParâCommon Stock | 1,400,000 |
| Retained Earnings | 52,840,000 |
During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows:
a. Purchased 87,500 shares of treasury common for $8 per share.
b. Sold 55,000 shares of treasury common for $11 per share.
c. Issued 20,000 shares of preferred 2% stock at $84.
d. Issued 400,000 shares of common stock at $13, receiving cash.
e. Sold 18,000 shares of treasury common for $7.50 per share.
f. Declared cash dividends of $1.60 per share on preferred stock and $0.05 per share on common stock.
g. Paid the cash dividends.
Required:
Journalize the entries to record the transactions.
For a compound transaction, if an amount box does not require an entry, leave it blank.
