Statement of 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) |
FeedbackPartially correct
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 | |
