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Included in the December 31, 2015, Jacobi Company balance sheet was the following shareholders’ equity section:Jacobi CompanyBalance Sheet (Shareholders' Equity)December 31, 20151Contrib
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 the December 31, 2016, shareholders’ equity section (assume that 2016 net income was $270,000).
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