Bush-Caine Company reported the following data on its December 31, 2018, balance sheet: Preferred stock, $50 par $ 50,000 Additional paid-in capital on preferred stock 4,000 Common stock, $10 par 100,000 Additional paid-in capital on common stock 80,000 Retained earnings 95,000 The following transactions were reported by the company during 2019: 1. Reacquired 200 shares of its preferred stock at $57 per share. 2. Reacquired 500 shares of its common stock at $16 per share. 3. Sold 100 shares of preferred treasury stock at $58 per share. 4. Sold 200 shares of common treasury stock at $17 per share. 5. Sold 100 shares of common treasury stock at $9 per share. 6. Retired the shares of common stock remaining in the treasury. The company maintains separate treasury stock accounts and related additional paid-in capital accounts for each class of stock. Required: 1. Prepare the journal entries required to record the treasury stock transactions using the cost method. 2. Assuming the company earned a net income in 2019 of $30,000 and declared and paid dividends of $10,000, prepare the shareholders' equity section of its balance sheet at December 31, 2019. CHART OF ACCOUNTS Bush-Caine Company General Ledger REVENUE 411 Sales Revenue ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Equipment 189 Accumulated Depreciation EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 305 Preferred Stock 311 Common Stock 318 Additional Paid-in Capital on Preferred Stock 320 Additional Paid-in Capital on Common Stock 322 Additional Paid-in Capital on Treasury Stock: Preferred 323 Additional Paid-in Capital on Treasury Stock: Common 331 Retained Earnings 336 Treasury Stock: Preferred 337 Treasury Stock Common Labels Contributed capital Amount Descriptions Additional paid-in capital from treasury stock: common Additional paid-in capital from treasury stock: preferred Additional paid-in capital on common stock Additional paid-in capital on preferred stock Common stock Preferred stock Retained earnings Total contributed capital Total contributed capital and retained earnings Total shareholders' equity Treasury stock PAGE 1 GENERAL JOURNAL Score: 192/223 POST. REF. DEBIT CREDIT DATE ACCOUNT TITLE Dec.31 Treasury Stock: Common 1 11,400.00 2 Cash 11,400.00 3 Dec.31 Treasury Stock: Common 8,000.00 4 Cash 8,000.00 5 Dec. 31 Cash 5,800.00 6 Treasury Stock: Preferred 5,700.00 7 Additional Paid-in Capital on Treasury Stock: Preferred 100.00 00 8 Dec. 31 Cash 3,400.00 9 3,200.00 10 200.00 11 900.00 Treasury Stock: Common Additional Paid-in Capital on Treasury Stock: Common Dec. 31 Cash Additional Paid-in Capital on Treasury Stock: Common Additional Paid-in Capital on Common Stock Treasury Stock: Common 12 200.00 13 500.00 14 1,600.00 15 Dec.31 Common Stock 2,000.00 16 Additional Paid-in Capital on Common Stock 1,200.00 17 Treasury Stock: Common 3,200.00 18 BUSH-CAINE COMPANY Score: 38/115 Shareholders' Equity December 31, 2019 1 Contributed Capital: 2 Preferred stock 3 Common stock $50,000.00 98,000.00 $4,000.00 4 Additional paid-in capital on preferred stock 5 Additional paid-in capital on common stock 78,300.00 6 6 7 00 9 10 11 12