Enter the following column headings across the top of a sheet of paper: Enter the transaction letter in the first column and show the effect (if any) of each of the following transactions on each financial statement category by entering a plus (+) or minus () sign and the amount in the appropriate column. Do not show items that affect
Enter the transaction letter in the first column and show the effect (if any) of each of the following transactions on each financial statement category by entering a plus (+) or minus () sign and the amount in the appropriate column. Do not show items that affect net income in the retained earnings column. You may also write the entries to record these transactions. You should assume that the transactions occurred in the listed chronological sequence and that no stock had been previously issued.
a. Issued 1,500 shares of $100 par value preferred stock at par.
b. Issued 2,400 shares of $100 par value preferred stock in exchange for land that had an appraised value of $306,000.
c. Issued 69,000 shares of $5 par value common stock for $11 per share.
d. Purchased 13,500 shares of common stock for the treasury at $13 per share.
e. Sold 6,000 shares of the treasury stock purchased in transaction d for $14 per share.
f. Declared a cash dividend of $1.75 per share on the preferred stock outstanding, to be paid early next year.
g. Declared and issued a 5% stock dividend on the common stock when the market price per share of common stock was$15.
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... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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Accounting What the Numbers Mean
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,