The following shareholders' equity accounts are reported by Branch Inc. on January 1, 2015:

Preferred shares ($4 noncumulative, 35,000 issued) ...............$ 350,000

Common shares (150,000 issued) .....................................2,400,000

Retained earnings ........................................................1,276,000

Accumulated other comprehensive income .......................... 15,000

The following selected transactions, given in chronological order, occurred during the year:

1. Issued 10,000 common shares for $30 per share.

2. Issued 500 preferred shares for $100 per share.

3. Issued 1,000 common shares in exchange for land. The fair value of the shares was $30 per share. The fair value of the land was $29,000.

4. Declared and paid the preferred shareholders a $2 per share cash dividend.

5. Determined that the company had other comprehensive income of $5,000 from the revaluation of land.

Instructions

For each of the above transactions, indicate its impact on the items in the table below. Indicate if the item will increase (+) or decrease (-), and by how much, or if there will be no effect (NE). The first transaction has been done for you as an example.

Transcribed Image Text:

Shareholders' Equity Accumulated Other Income NE Preferred Comon Retalned Comprehensive iabilitles31ae Shares +$300,000 Earnings NE Assets 1. +$300,000 NE NE