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Bush-Caine Company reported the following data on its December 31, 2015, balance sheet: Preferred stock, $50...

Bush-Caine Company reported the following data on its December 31, 2015, balance sheet:

Preferred stock, $50 par $50,000

Additional paid-in capital on preferred stock 4,000

Common stock, $10 par 100,000

Additional paid-in capital on common stock 80,000

Retained earnings 95,000

The following transactions were reported by the company during 2016:

1. Reacquired 200 shares of its preferred stock at $57 per share.

2. Reacquired 500 shares of its common stock at $16 per share.

3. Sold 100 shares of preferred treasury stock at $58 per share.

4. Sold 200 shares of common treasury stock at $17 per share.

5. Sold 100 shares of common treasury stock at $9 per share.

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. Prepare the journal entries required to record the treasury stock transactions using the cost method.

2. Assuming the company earned a net income in 2016 of $30,000 and declared and paid dividends of $10,000, prepare the shareholders’ equity section of its balance sheet at December 31, 2016.

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