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DEMONSTRATION PROBLEM (S.O. 3) The Jefferson Corporaton and the Franklin Company have the following stockholders'...

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DEMONSTRATION PROBLEM (S.O. 3) The Jefferson Corporaton and the Franklin Company have the following stockholders' equity accounts on January 1, 2009. Franklin Company Jefferson Corporation 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 450,000 750,000 300,000 par value Total $1400:000 Retained earnings Total Both companies use the cost method of accounting for treasury stock. During 2009, the companies had the following treasury stock transactions. Jefferson Corporation Feb. 1 Purchased 10,000 shares at $9 per share. May 2 Sold 2,000 shares at $10 per share. Aug. 17 Sold 4,000 shares at $13 per share. Dec. 15 Sold 3,000 shares at $8 per share Franklin Company Mar. June 19 Sept. 2 Dec. 23 Purchased 7,000 shares at $7 per share 6 Sold 1,500 shares at $9 per share Sold 3,000 shares at $6 per share. Sold 2,000 shares at $6 per share. Instructions (a) Journalize the treasury stock transactions for both companies (omit explanations) (b) Prepare a stockholders' equity section for Franklin Company at December 31, 2009, assuming the company earned $75,000 of net income in 2009 [RI

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