Comprehensive Instructions

Chart of Accounts

Labels and Amount Descriptions

General Journal

Balance Sheet

Instructions

Included in the December 31, 2015, Jacobi Company balance sheet was the following shareholders’ equity section:

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 December 31, 2016, shareholders’ equity section (assume that 2016 net income was $270,000).

Answer rating: 100% (QA)

1 2016 Jan 4 Dividends Payable Preferred 6 x x 2000 6000 Dividends Payable Common 46400 Cash 52400 30000 1000 in treasury 29000 x 160 46400 Jan 5 Cash ... View the full answer