Included in the December 31, 2012, Jacobi Company balance sheet was the followin
ID: 2459068 • Letter: I
Question
Included in the December 31, 2012, Jacobi Company balance sheet was the following shareholders' equity section:
The company engaged in the following stock transactions during 2013:
1. Prepare journal entries to record the preceding transactions. If a memo entry is required, select "Memo entry" from dropdown and leave the amount box blank or enter "0". For a compound transaction, if an amount box does not require an entry, leave it blank.
2. Prepare the December 31, 2013, shareholders' equity section (assume that 2013 net income was $270,000).
Explanation / Answer
JAN 4 DIVIDEND ON PREFERED STOCKA/C..............DR $6000
DIVEDEND ON COMMON STOCK A/C...............DR $48000
TOBANK A/C $54000
JAN 5 BANK A/C........................................DR $55000
TO PREFERED STOCK 6% $50000
TO ADDITIONAL PAID IN ACPITAL $5000
JAN 22 BANK A/C..............................................DR $92000
TO COMMON STOCK A/C $20000
TO ADDITIONAL PAID IN CAPITALA/C $72000
APR 2 CASH A/C.............................................DR $16800
TOADDITIONAL PAID IN CAPITAL $2800
TO TREASURY STOCK $14000
MAY 14 RETAINED EARNINGS A/C................DR $ 85000
TO STOCK DIVEDEND DISTRIBUTABLE $85000
JUNE 4 RETAINED EARNINGS A/C.................................DR$7500
TO DIVIDEND PAYBLE ON PREFERED STOCK $7500
JUN 29 STOCK DIVIDEND DISTRIBUTABLE A/C.......................DR $85000
TO COMMON STOCK $17000
TO ADDITIONAL PAID IN CAPITAL $68000
JULY 5 DIVIDEND PAYBLE ON PREFERED STOCK A/C.................DR $7500
TO CASH A/C $7500
JULY 20 OLD COMMON STOCK A/C.................DR $187000
TO NEW COMMON STOCK A/C $187000
AUG 3 LOSS ON INVESTMENT A/C................................DR $25000
TO SHARE OF DROT COMPANY $25000
RETAIMED EARNINGS A/C....................................DR $20000
TO PROPERTY DIVIDEND PAYBLE $20000
SEPT 14 PROPERTY DIVIDEND PAYBLE A/C..........................DR $20000
TO SHARES IN DROT COMPANY $20000
DEC 3 RETAINED EARNING A/C ..........................................DR $74820
TO DIVIDEND PAYBLE ON COMMON STOCK $67320
TO DIVIDEND PAYBLE ON PREFERD STOCK $7500
SHARE HOLDERS EQUITY CALCULATION-
CONTRIBUTED CAPITAL
PREFERED STOCK 6% PAR $100 =$250000
ADDITIONAL PAID IN CAPITAL ON PREFERED STOCK =$17000
$267000
COMMON STOCK PAR $2.50 =$187000
ADDITIONAL PAID IN CAPITAL =$380000
$567000
TOTAL CONTRIBUTED CAPITAL $834000
RETAINED EARNINGS =$627000
INCOME OF CURRENT YEAR =$270000
ACCUMULATED OR OTHER COMPREHENSIVE INCOME(LOSS)
DECEREASE IN VALUE OF SHARE AVILABLE FOR SALE =($51000)
LESS TREASURY STOCK =($6000)
$840000
TOTAL SHRAE HOLDERS EQUITY $1674000