Enter the following column headings across the top of a sheet of paper: Enter the transaction letter

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Enter the following column headings across the top of a sheet of paper:

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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 same chronological sequence as listed here:

a. Sold 4,100 shares of $50 par value preferred stock at $52.50 per share.

b. Declared the annual cash dividend of $2.20 per share on common stock. There were 5,600 shares of $1 par value common stock issued and outstanding throughout the year.

c. Issued 8,000 shares of $50 par value preferred stock in exchange for a building when the market price of preferred stock was $54 per share.

d. Purchased 1,700 shares of preferred stock for the treasury at a price of $57 per share.

e. Sold 1,100 shares of the preferred stock held in treasury (see d) for $58 per share.

f. Declared and issued a 12% stock dividend on the $1 par value common stock (see b) when the market price per share was $44.

Common Stock
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

ISBN: 978-1260565492

12th edition

Authors: David Marshall, Wayne McManus, Daniel Viele

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