The annual report for Sneer Corporation disclosed that thecompany declared and paid preferred dividends in the amount of$160,000 in the current year. It also declared and paid dividendson common stock in the amount of $2.60 per share. During thecurrent year, Sneer had 1 million common shares authorized; 360,000shares had been issued; and 154,000 shares were in treasury stock.The opening balance in Retained Earnings was $860,000 and NetIncome for the current year was $360,000.
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Prepare journal entries to record the declaration, and payment,of dividends on (a) preferred and (b) commonstock. (If no entry is required for a transaction/event,select "No Journal Entry Required" in the first accountfield.)
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Using the information given above, prepare a statement ofretained earnings for the year ended December 31.
The annual report for Sneer Corporation disclosed that thecompany declared and paid preferred dividends in the amount of$160,000 in the current year. It also declared and paid dividendson common stock in the amount of $2.60 per share. During thecurrent year, Sneer had 1 million common shares authorized; 360,000shares had been issued; and 154,000 shares were in treasury stock.The opening balance in Retained Earnings was $860,000 and NetIncome for the current year was $360,000.
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| Prepare journal entries to record the declaration, and payment,of dividends on (a) preferred and (b) commonstock. (If no entry is required for a transaction/event,select "No Journal Entry Required" in the first accountfield.) - Using the information given above, prepare a statement ofretained earnings for the year ended December 31. |
Related questions
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) |
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 | $ |
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) |
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 | $ |
