On December 31, 2016, relevant financial information of the First Financial Company was as follows:
Preferred shareholders participate equally in cash dividends declared on common shares. During 2017, First Financial engaged in the following transactions:
|
Mar. |
15 |
Declared the regular semi-annual $2 per share cash dividend on the preferred shares and a $0.50 per share cash dividend on the common shares. |
|
Apr. |
30 |
Paid the dividends declared on March 15. |
|
Sept. |
15 |
Declared a $600 cash dividend. |
|
Oct. |
30 |
Paid the dividends declared on September 15. |
|
Dec. |
15 |
Declared a 10 per cent common share dividend distributable on January 15 to shareholders of record January 10, 2018. The market value of the shares on December 15 was $18 per share.* |
|
Dec. |
31 |
Transferred net income of $90,000 from the Income Summary account in the general ledger to the Retained Earnings account. |
|
Dec. |
31 |
The board authorized $10,000 of retained earnings to be restricted for plant expansion.** |
|
*complete only if Appendix 1 covered |
||
|
**complete only if Appendix 2 covered |
Required:
- Prepare journal entries to record the 2017 transactions, including closing entries. Descriptions are not necessary. Show calculations when needed.
- Prepare the statement of changes in equity for the year ended December 31, 2017.
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