Gray Company lists the following shareholders’ equity items on its December 31, 2018, balance sheet:

The following stock transactions occurred during 2019:
Jan. 4 Issued 3,000 shares of common stock at $25 per share.
30 Paid the annual 2015 per share dividend on preferred stock and the $2 per share dividend on common stock.
These dividends had been declared on December 31, 2018.
Mar. 2 Issued 400 shares of preferred stock at $125 per share.
May 7 Reissued 600 shares of treasury stock at $24 per share.
June 15 Split the common stock 2-for-1, reducing the par value to $5 per share.
July 2 Declared a 5% stock dividend on the outstanding common stock, to be issued on August 3. The stock is selling for $14 per share.
Aug. 3 Issued the stock dividend.
Oct. 1 Declared a property dividend payable to common shareholders on November 1. The dividend consists of 200 Lamb Company bonds that are classified as an available-for-sale investment. The bonds had been acquired at a cost of $24,000 and have a carrying value of $30,000. The bonds are currently selling for $32,000.
Nov. 1 Issued the property dividend to common shareholders.
Dec. 31 Declared the annual per share dividend on the outstanding preferred stock and a $1 per share dividend on the outstanding common stock, to be paid on January 30, 2020.

Required:
1. Prepare journal entries to record the preceding transactions.
2. Prepare the December 31, 2019, shareholders’ equity section (assume that 2019 net income was $225,000).

Transcribed Image Text:

Contributed Capital: Preferred stock, 8%, $100 par Common stock, $10 par Additional paid-in capital on preferred stock Additional paid-in capital on common stock Total contributed capital Retained earnings Accumulated other comprehensive income: Unrealized increase in value of available-for-sale securities Total contributed capital, retained earnings, and aCcumulated other comprehensive income Less: Treasury stock (2,000 shares of common at $21 per share, acquired on March 3, 2015) Total Shareholders' Equity $120,000 180,000 21,600 90,000 $411,600 230,000 6,000 $647,600 (42,000) $605,600