Question

Infer from the statements the events and transactions that affected Anaconda International Corporation’s shareholders’ equity during 2018, 2019, and 2020. Prepare the journal entries that reflect those events and transactions.

Comparative statements of shareholders' equity for Anaconda International Corporation were reported as follows for the fiscal years ending December 31, 2018, 2019, and 2020. Retained Earnings 1,882 30 (3) (18) ANACONDA INTERNATIONAL CORPORATION Statements of Shareholders' Equity For the Years Ended Dec. 31, 2018, 2019, and 2020 ($ in millions) Preferred Common Additional Stock Stock Paid-In $10 par $1 par Capital Balance at January 1, 2018 70 490 Sale of preferred shares 930 Sale of common shares 56 Cash dividend, preferred Cash dividend, common Net income Balance at December 31, 2018 1,476 Retirement of shares (21) Cash dividend, preferred Cash dividend, common 3-for-2 split effected in the form of a dividend (15) Net income Balance at December 31, 2019 1,440 Common stock dividend 40 Cash dividend, preferred Cash dividend, common Net income Balance at December 31, 2020 80 1,480 Total Shareholders' Equity 2,442 960 64 (3) (18) 350 3,795 (46) (3) (3) 350 2,211 (22) (3) (22) (22) 500 4,224 500 2,664 (45) (3) (24) 542 3,134 (3) (24) 542 4,739 453 0 45 1,450

2018

Record sale of preferred stock.

Record sale of common stock.

Record declaration of cash dividend for preferred shares.

Record payment of cash dividend for preferred shares.

Record declaration of cash dividend for common shares.

Record payment of cash dividend for common shares.

Record transfer of net income to retained earnings.

2019

Record the repurchase of shares for retirement. (Assume weighted average method).

Record declaration of cash dividend for preferred shares.

Record payment of cash dividend for preferred shares.

Record declaration of cash dividend for common shares

Record payment of cash dividend for common shares.

Record the stock split for preferred shares effected in the form of a dividend.

Record transfer of net income to retained earnings.

2020

Record distribution of common stock dividend.

Record declaration of cash dividend for preferred shares.

Record payment of cash dividend for preferred shares.

Record declaration of cash dividend for common shares.

Record payment of cash dividend for common shares.

Record transfer of net income to retained earnings.

Answer 1

Date	Particulars	Debit ($)	Credit ($)
2018	Cash	960
	Preferred stock (3*30)	90
	Paid capital excess of par, preferred		1050
	Cash	64
	Common stock (8*3)	24
	Paid in capital excess of par, common		88
	Retained earnings	3
	Cash dividends payable, preferred		3
	Cash dividends payable, preferred	3
	Cash		3
	Retained earnings	18
	Cash dividends payable, common		18
	Cash dividends payable, common	18
	Cash		18
	Income summary	350
	Retained earnings		350
Date	Particulars	Debit ($)	Credit ($)
2019	Common stock (3*3)	9
	Paid in capital -excess of par ((690+56)/(70+8))*3	29
	Retained earnings	22
	Cash		60
Date	Particulars	Debit ($)	Credit ($)
2020	Retained earnings	3
	Cash dividends payable, preferred		3
	Cash dividends payable, preferred	3
	Cash		3
	Retained earnings	22
	Cash dividends payable, common		22
	Cash dividends payable, common	22
	Cash		22
	Paid in capital excess of par, preferred	15
	Preferred stock		15
	Income summary	500
	Retained earnings		500