Question 1 [5 marks] 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 ' H II Increase or decrease e.g., \"cash: $6,000 ()", "noncash asset: $12,000 (+) , ital (APIC henceforth): $25,000 (+)", "retained earnings (RE henceforth): $15,000 ()", etc. additional paidin cap a) On Feb. 1 the firm declares a cash dividend of $0.40 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.1012) Answer: Feb. 1 Dividend declaration. Assets Liabilities & Equity May 1, Dividend payment. Assets Liabilities & Equity b) On Nov. 1, the firm raises capital through equity issues. The firm has issued 50,000 shares of $1 par value common stock for $1 5.00 per share. (Lecture notes, pp.78) Answer: Nov. 1, Equity issue. Assets Liabilities & Equity Question 2 [5 marks] Consider a firm that has 30,000 common shares outstanding, with a par value of $1. The stock is trading at $71 per share. Answer questions a) and b) below. (Lecture notes, pp.1013) a) If the firm distributes a 20% stock dividend what effect will this transaction have on the firm's balance sheet? Using the template below, provide the relevant accounting entries showing the dollar amounts and whether they are an increase or decrease e.g., "cash: $6,000 ()\Answer: Feb. 1, Dividend declaration. Assets Liabilities & Equity b) Suppose that instead of the stock dividend described in part (a), the firm has declared a 3for1 stock split. Determine the number of shares after this split and whether the split has effect on the firm's balance sheet. Answer: Question 3 [5 marks] CloudWorks, Inc. has an employee stock option plan (ESOP henceforth). In 2031, the firm's executive officers were granted 10,000 options with an exercise price of $40 and a vesting period of 3 years. The estimate of the fair value of the granted options is $6 per unit of options. The firm's common stock has a par value of $1, and its current market price is $38 per share. Answer questions a) and b) below. (Lecture notes, pp.1417) a) Using the template below, provide relevant accounting entries that show the effect of the option granting on the balance sheet at the end of 2031. Clearly indicate the dollar amount and whether it is an increase or decrease, e.g., "cash: $6,000 ()", "noncash asset: $12,000(+)","APIC: $25,000 (+)", "RE: $15,000 ()", etc, Answer: FYE 2031, ESOP compensation. Assets Liabilities & Equity % b) Suppose that in 2035, one of the executives exercises 200 options when the market price of the stock is $55, higher than the exercise price $40. What will be the effect of the option exercise on the balance sheet? Using the template below, provide relevant accounting entries indicating the dollar amounts and whether they are an increase or decrease e.g., \"cash: $6,000 ()\