Chapter 15, Problem 16P

Treasury Stock, Cost Method Bush-Caine Company reported the following data on its December 31, 2018, balance sheet:

The following transactions were reported by the company during 2019:

1. 1. Reacquired 200 shares of its preferred stock at $57 per share.
2. 2. Reacquired 500 shares of its common stock at $16 per share.
3. 3. Sold 100 shares of preferred treasury stock at $58 per share.
4. 4. Sold 200 shares of common treasury stock at $17 per share.
5. 5. Sold 100 shares of common treasury stock at $9 per share.
6. 6. Retired the shares of common stock remaining in the treasury.

The company maintains separate treasury stock accounts and related additional paid-in capital accounts for each class of stock.

Required:

1. 1. Prepare the journal entries required to record the treasury stock transactions using the cost method.
2. 2. Assuming the company earned a net income in 2019 of $30.000 and declared and paid dividends of $10,000, prepare the shareholders’ equity section of its balance sheet at December 31, 2019.