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Intermediate Accounting: Reporting...
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Intermediate Accounting: Reporting...
Included in the December 31, 2018, Jacobi Company balance sheet was the following shareholders’ equity section:
The company engaged in the following stock transactions during 2019:
Required:
- 1. Prepare journal entries to record the preceding transactions.
- 2. Prepare the December 31, 2019, shareholders’ equity section (assume that 2019 net income was $270,000).
1.
Prepare journal entry to record the given transactions.
Stockholders’ Equity Section: It is refers to the section of the balance sheet that shows the available balance stockholders’ equity as on reported date at the end of the financial year.
Prepare journal entry to record the given transactions.
| Date | Account Titles and explanation | Debit ($) | Credit ($) |
| January 4, 2019 | Dividend payable: Preferred | 6,000 | Â |
| Â | Dividend payable: Common (1) | 46,400 | Â |
| Â | Â Â Â Â Cash | Â | 52,400 |
| Â | (To record declaration of preferred and common stock) | Â | Â |
| Â | Â | Â | Â |
| January 5, 2019 | Cash | 55,000 | Â |
| Â | Â Â Â Â Â Preferred stock, $100 par | Â | 50,000 |
| Â | Â Â Â Â Additional paid-in capital on preferred stock | Â | 5,000 |
| Â | Â ( To record issuance of preferred stock) | Â | Â |
| Â | Â | Â | Â |
| January 22, 2019 | Cash | 92,000 | Â |
| Â | Â Â Â Â Common stock, $5 par | Â | 20,000 |
| Â |
    Additional paid-in capital on common stock |  | 72,000 |
| Â | Â ( To record issuance of common stock) | Â | Â |
| Â | Â | Â | Â |
| April 2, 2019 | Cash | 16,800 | Â |
| Â | Â Â Â Â Treasury stock | Â | 14,000 |
| Â |
    Additional paid-in capital on treasury stock |  | 2,800 |
| Â | Â (To record the reissuance of treasury stock) | Â | Â |
| Â | Â | Â | Â |
|
May 14, 2019 | Retained earnings (2) | 84,250 | Â |
| Â |
    Common stock to be distributed      |  | 16,850 |
| Â | Â Â Â Â Additional paid-in capital from stock dividend | Â | 67,400 |
| Â | (To record declaration of stock dividend) | Â | Â |
| Â | Â | Â | Â |
| June 4, 2019 | Retained earnings | 7,500 | Â |
| Â | Â Â Â Â Dividends payable: Preferred (3) | Â | 7,500 |
| Â | (To record the declaration of annual per share dividend to the preferred) | Â | Â |
| Â | Â | Â | Â |
| August 29, 2019 | Common stock to be distributed | 16,850 |  |
| Â | Â Â Â Â Common stock, $5 par | Â | 16,850 |
| Â | Â (To record the issuance of stock dividend) | Â | Â |
| Â | Â | Â | Â |
| July 5, 2019 | Dividends payable: Preferred stock | 7,500 | Â |
| Â | Â Â Â Â Cash | Â | 7,500 |
| Â | (To record the amount of dividend paid on preferred stock) | Â | Â |
| Â | Â | Â | Â |
| July 20, 2019 | No entry is required | Â | Â |
| Â | Â | Â | Â |
| August 3 ,2019 | Loss on disposal of investment | 25,000 | Â |
| Â |
    Unrealized decrease in the value of available-for-sale of securities       |  | 15,000 |
| Â |
    Allowance for change in value investment      |  | 10,000 |
|  | (To record the declaration of property dividend) |  |  |
| Â | Â | Â | Â |
| Â | Reta |
2.
Prepare Company J’s statement of stockholder’s equity section for 2019.
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