A company enters into the following transactions relating to its equity: 1. Issues preferred stock for cash

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A company enters into the following transactions relating to its equity:
1. Issues preferred stock for cash
2. Converts preferred stock to common stock
3.
Issues common stock for cash
4. Issues common stock for a building
5. Reissues for cash stock that was held as treasury stock
6. Purchases treasury stock for cash
7. Pays a cash dividend on common stock
8.
Declares a 3-for-1 stock split
9. Distributes a 50% stock dividend
Required
Identify
whether each transaction would be reported as a financing activity on the statement of cash flows or not reported on the statement of cash flows.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Financial ACCT2

ISBN: 978-1111530761

2nd edition

Authors: Norman H. Godwin, C. Wayne Alderman

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