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ID: 2560574 • Letter: C

Question

Click the icon to view the statement.) Click the icon to view the transactions.) During 2017, Diamond completed these transactions that affected shareholders' equity: Feb 13 Issued 5,000 common shares for $3 per share. June 7 Declared the regular cash dividend on the preferred shares. July 24 Paid the cash dividend. Aug 9 Distributed a 8% stock dividend on the common shares. Market price of the 1. Journalize Diamond's transactions. Explanations are not required. 2. Report Diamond Jewellery Limiteds shareholders' equity at December 31, 2017. Net income for 2017 was $28,000. Requirement 1. Joumalize the transactions. (Record debits first, then credits. Explanations are not required.) Feb 13: Issued 5,000 common shares for $3 per share. common shares was $4 per share 20 Sold 200 common shares for $7 per share Nov Journal Entry Date Debit Credit Feb 13 Assets Current assets Property and equipment, net ...$ 33,100 55,100 $ 88,200 June 7: Declared the regular cash dividend on the preferred shares. Total assets Journal Entry Liabilities and Equity Liabilities Shareholders' equity Date Debit Credit $ 37,700 June 7 $0.90 cumulative preferred shares, 400 shares issued Common shares, 6,100 shares issued Retained earnings 2,000 24,500 24,000 $ 88,200 July 24: Paid the cash dividend. Journal Entry Total liabilities and equity Date Debit Credit July 24 Aug 9: Distributed a 8% stock dividend on the common shares. Market price of the common shares was $4 per share. Journal Entry Date Debit Credit Aug 9 Nov 20: Sold 200 common shares for $7 per share Journal Entry Date Debit Credit Nov 20 Requirement 2. Report Diamond Jewellery Limited's shareholders' equity at December 31, 2017. Net income for 2017 was $28,000 (Enter the accounts in the proper order.) Shareholders' Equity: Total shareholders' equity

Explanation / Answer

Feb 13. Casha/c. Dr. 15000

To common Shares 15000

June 7. Dividends. Dr. 1800

To dividend payable. 1800

July 24. Dividend payable. Dr. 1800

To Cash. 1800

Aug 9 Retained Earning. Dr. 3552

To common stock. 2664

To paid in capital. 888

Nov 20 Cash Dr. 1400

To common stock. 600

To paid in capital. 800

Requirement 2:

shareholders Equity as at 31 Dec 2017

Common Shares:

6100. Shares 24500

5000 shares. 15000

888 shares. 2664

200 shares. 600

Paid in capital (800+888)

43664

1688

Retained Earnings

Opening. 24000

+ Net income 28000

- stock dividend. 3552

48448

Particulars amount Cumulative Preference shares 2000