Question

Statement of Shareholders' Equity At the end of 2017, Jeffco Inc. had the following equity accounts...

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)

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Partially 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 $
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