At the end of 2017, Jeffco Inc. had the following equity accounts and balances:
ID: 2578518 • Letter: A
Question
At the end of 2017, Jeffco Inc. had the following equity accounts and balances:
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.
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.
Common shares, no par (175,000 shares issued and outstanding) $1,926,400 Retained earnings 310,000Explanation / Answer
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.
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.
Date accounts & Explanation debit credit a) 2018 Cash 280000 Common share 280000 (To record issue of common share) b) Cash a/c 125000 Preferred shares 120000 Contributed Surplus-Preferred Shares 5000 (To record issue of preferred shares) c) Retained earnings a/c 15000 Cash a/c 15000 (To record dividend declared and paid) d) Retained earnings a/c 8500 Common shares 17500 Cash a/c 26000 (Record repurchase of common shares)Related Questions
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