Question
Included in the December 31, 2015, Jacobi Company balance sheet was the following shareholders equity section: Question not attempted. Jacobi Company Balance Sheet (Shareholders' Equity)
Included in the December 31, 2015, Jacobi Company balance sheet was the following shareholders equity section:
Question not attempted.
Jacobi Company |
Balance Sheet (Shareholders' Equity) |
December 31, 2015 |
1 | Contributed Capital: |
|
|
2 | Preferred stock, 6%, $100 par | $200,000.00 |
|
3 | Additional paid-in capital on preferred stock | 12,000.00 | $212,000.00 |
4 | Common stock, $5 par | $150,000.00 |
|
5 | Additional paid-in capital on common stock | 240,000.00 | 390,000.00 |
6 | Total contributed capital |
| $602,000.00 |
7 | Retained earnings |
| 627,000.00 |
8 | Accumulated other comprehensive income (loss): |
|
|
9 | Unrealized decrease in value of available-for-sale securities |
| (41,000.00) |
10 | Total contributed capital, retained earnings, and accumulated other comprehensive income |
| $1,188,000.00 |
11 | Less: Treasury stock (1,000 shares of common stock at cost, acquired on 2/3/2015) |
| (20,000.00) |
12 | Total Shareholders Equity |
| $1,168,000.00 |
The company engaged in the following stock transactions during 2016:
Jan. | 4 | Paid the semiannual dividend on the outstanding preferred stock and a $1.60 per share annual dividend on the outstanding common stock. These dividends had been declared on December 1, 2015. |
5 | Issued 500 shares of preferred stock at $110 per share. | |
22 | Issued 4,000 shares of common stock at $23 per share. | |
Apr. | 2 | Reissued 700 shares of treasury stock at $24 per share. |
May | 14 | Declared a 10% stock dividend on the outstanding common stock, payable on June 29. The common stock is currently selling for $25 per share. |
Jun. | 4 | Declared the semiannual cash dividend on the outstanding preferred stock, payable on July 5. |
29 | Issued the stock dividend declared on May 14. | |
Jul. | 5 | Paid the cash dividend declared on June 4. |
20 | Split the common stock 2-for-1 and reduced the par value to $2.50 per share. | |
Aug. | 3 | Declared a property dividend, payable to common shareholders on September 14. The dividend consists of an available-for-sale investment in 50 Drot Company bonds. The bonds had been acquired for $45,000, but have a carrying value of $30,000. The bonds are currently selling for $20,000. |
Sep. | 14 | Paid the property dividend declared on August 3. |
Dec. | 3 | Declared the semiannual cash dividend on the outstanding preferred stock and a $0.90 per share annual dividend on the outstanding common stock. |
Required:
1. | Prepare journal entries to record the preceding transactions. |
2. | Prepare the December 31, 2016, shareholders equity section (assume that 2016 net income was $270,000). |
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