Reference no: EM132513419

Bionic Company's shareholder's equity contained the following items on 12/31/X1.

Common Stock- $2 par value, 500,000 shares authorized, 60,000 issued and outstanding ................$120,000

Paid in Capital in Excess of Par-common............................................................................................................................$600,000

Preferred Stock-10% non-cumulative, $5 par value, 90,000 shares authorized, 20,000 issued and outstanding................$100,000

Retained Earnings ............ $700,000

Total Shareholder's Equity............................................................................$1,520,000

During 20X2 Bionic had the following transactions:

20-Jan Issued 10,000 additional shares of preferred stock and received 100,000.

20-Feb Declared dividends of $3 per share common stock with 3/15 record date and 3/31 payment date.

31-Mar Paid the common dividends declared on February 20th.

15-Apr Purchased 20,000 of its own common shares for $180,000.

30-Jun Declared preferred dividends of 10% par value. Record date is 7/15 and payment date 7/31.

31-Jul Paid the preferred dividends declared June 30th.

31-Dec Closed $5 million of earnings from the income summary into retained earnings.

Question a. Prepare journal entries for 20X2.

Question b. Prepare statement of retained earnings for the year ending 12/31/X2.

Question c. Prepare the shareholder's equity section from Sonic Company's balance sheet 12/31/X2.