Question

Problem 10-84A (Algorithmic) Statement of Stockholders' Equity At the end of 2019, Jeffco Inc. had the following equity accounts and balances: Common stock, $10 par $800,000 Additional paid-in capital-common stock 200,000 Retained earnings 279,000 During 2020, Jeffco engaged in the following transactions involving its equity accounts: a. Sold 8,000 shares of common stock for $35 per share. b. Sold 1,000 shares of 9%, $120 par preferred stock at $125 per share. c. Declared and paid cash dividends of $14,000. d. Repurchased 400 shares of treasury stock (common) for $53 per share. e. Sold 100 of the treasury shares for $59 per share.

Answer 1

1.

Date	Account title and explanation	Debit	Credit
2020
a.	Cash (8,000 x $35)	$ 280,000
	Common stock (8,000 x $10)		$ 80,000
	Additional paid in capital-Common stock		$ 200,000
b.	Cash (1,000 x $125)	$ 125,000
	Preferred stock (1,000 x $120)		$ 120,000
	Additional paid in capital-Preferred stock		$ 5,000
c.	Cash dividend / Retained earnings	$ 14,000
	Cash		$ 14,000
d.	Treasury stock	$ 21,200
	Cash (400 x $53)		$ 21,200
e.	Cash (100 x $59)	$ 5,900
	Treasury stock (100 x $53)		$ 5,300
	Additional paid in capital from treasury stock		$ 600

2.

Jeffco, Inc.
Balance Sheet (Partial)
December 31, 2020
Stockholders' equity:
Preferred stock		$ 120,000
Common stock (800,000+80,000)		$ 880,000
Additional paid in capital:
Additional paid in capital-Common stock (200,000+200,000)	$ 400,000
Additional paid in capital-Preferred stock	$ 5,000
Additional paid in capital from treasury stock	$ 600	$ 405,600
Total capital stock		$ 1,405,600
Retained earnings (279,000-14,000+87,000)		$ 352,000
Less:
Treasury stock (21,200-5,300)		-$ 15,900
Total stockholders' equity		$ 1,741,700