Assume Mables of Montana, Inc., completed the following transactions during 2014, the companys 10th year of operations: Feb 3 Issued


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?

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...
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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Related Book For  answer-question

Financial Accounting

ISBN: 978-0133427530

10th edition

Authors: Walter Harrison, Charles Horngren, William Thomas

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Question Posted: July 25, 2014 08:15:18