For each transaction described in a$)$ and b$),$ provide accounting entries that show the effects of the

transaction on the firm's balance sheet. Clearly indicate the dollar amounts and whether they are an

increase or decrease, e$.$g$.,$ "cash: $$6,000(-{)}^{?},$ "noncash asset: $$12,000(+{)}^{?},$ "additional paid$-$in cap$-$

ital $($APIC henceforth$)$: $$25,000(+{)}^{?}"$ "retained earnings $($RE henceforth$)$: $$15,000(-{)}^{**},$ etc.

a$)$ On Feb. $1,$ the firm declares a cash dividend of $$0\mathrm{.}30$ per share, to be distributed on May $1.$

Assume the firm has $200,000$ shares outstanding in total. On May $1,$ the dividends are paid as

announced. $($Lecture notes, pp$\mathrm{.}10-12)$

Answer:

F$.$S$.$A$.$

b$)$ On Nov. $1,$ the firm raises capital through equity issues. The firm has issued $100,000$ shares of $$1$

par value common stock for $$15\mathrm{.}00$ per share. $($Lecture notes, pp$\mathrm{.}7-8)$

Answer: