The following shareholders' equity accounts are reported by Talty Inc. on January 1, 2018:

Preferred shares ($6 cumulative, 6,000 issued).....................$ 600,000

Common shares (500,000 issued)..........................................4,000,000

Retained earnings..................................................................1,958,000

Accumulated other comprehensive income................................25,000

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

1. Reacquired and retired 20,000 common shares for $12 per share.

2. Issued 10,000 common shares for $14 per share.

3. Issued 5,000 common shares in exchange for equipment. The fair value of the shares was $14 per share. The current value of the equipment could not be reliably determined.

4. Issued 1,000 preferred shares for $100 per share.

5. The annual preferred share cash dividend was declared and paid during the year.

6. Determined that the company had another comprehensive loss of $5,000 arising from the reversal of a previously recorded revaluation gain on land.

Instructions

For each of the above transactions, indicate its impact on the items in the table that follows. 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 Share Capital Assets Liabilities Preferred Common Retained Accumulated Other Shares Shres Earnings C Comprehensive Income 1. NE NE -$80,0o0 NE $240,000 $160,000o