The Jeerson Corporation and the Franklin Company have the following stockholders’ equity accounts on January 1 , 2014.
|
Jeerson Corporation |
Franklin Company |
||
|
Common stock, no par stated value $2 |
$ 600,000 |
Common stock, $3 par |
$ 900;000 |
|
Paid-in capital in excess of stated value |
900,000 |
Paid-in capital in excess of |
|
|
Retained earnings |
300,000 |
par — Common Stock |
450,000 |
|
Total |
S1,800,000 |
Retained earnings |
750,000 |
|
Total |
$2,100,000 |
Both companies use the cost method of accounting for treasury stock. During 2014, the companies had the following treasury stock transactions.
|
Jeerson Corporation |
Franklin Company |
||
|
Feb.1 |
Purchased 10,000 shares at $9 per share. |
Mar. .6 |
Purchased 7,000 shares at $7 per share. |
|
May 2 |
Sold 2,000 shares at $10 per share. |
June 19 |
Sold 1,500 shares at $9 per share. |
|
Aug.17 |
Sold 4,000 shares at $13 per share. |
Sept. 2 |
Sold 3,000 shares at $6 per share. |
|
Dec.15 |
Sold 3,000 shares at $8 per share. |
Dec. 23 |
Sold 2,000 shares at $6 per share. |
Instructions
(a).Journalize the treasury stock transactions for both companies (omit explanations)
Prepare a stockholders’ equity section for Franklin Company at December 31, 2014, assuming the company earned 575,000 of net income in 2014.