Question: Assume Fast Foods of Texas Inc completed the following transactions

Assume Fast Foods of Texas, Inc., completed the following transactions during 2014, the company’s 10th year of operations:
Feb 3 Issued 11,000 shares of common stock ($3.00 par) for cash of $296,000.
Mar 19 Purchased 2,400 shares of the company’s own common stock at $28 per share.
Apr 24 Sold 1,500 shares of treasury common stock for $34 per share.
Aug 15 Declared a cash dividend on the 8,000 shares of $0.90 no-par preferred stock.
Sep 1 Paid the cash dividends.
Nov 22 Declared and distributed a 10% stock dividend on the 98,000 shares of $3.00 par common stock outstanding. The market value of the common stock was $35 per share.

1. Analyze each transaction in terms of its effect on the accounting equation of Fast Foods of Texas, Inc.
2. What impact did each transaction have on cash flows?

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  • CreatedJuly 25, 2014
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