Assume Mable’s of Montana, Inc., completed the following transactions during 2014, the company’s 10th year of operations:
Feb 3 Issued 10,000 shares of common stock ($ 3.00 par) for cash of $ 297,000.
Mar 19 Purchased 2,700 shares of the company’s own common stock at $ 31 per share.
Apr 24 Sold 1,400 shares of treasury stock for $ 32 per share.
Aug 15 Declared a cash dividend on the 16,000 shares of $ 0.50 no- par preferred stock.
Sep 1 Paid the cash dividends.
Nov 22 Declared and distributed a 20% stock dividend on the 94,000 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 Mable’s of Montana, Inc.
2. What impact did each transaction have on cash flows?