Assume that during Year 15, Bullseye Corporation, a U.S. retailer, engages in the following six transactions. Bullseye

Question:

Assume that during Year 15, Bullseye Corporation, a U.S. retailer, engages in the following six transactions. Bullseye Corporation applies U.S. GAAP and reports its results in millions of U.S. dollars ($). Do not be concerned that after these transactions, the balance in the Cash account is negative. The firm will deal with that issue in transactions not shown here.

(1) The firm issues 20 million shares of $0.0833 par value common stock for a total of $960 million cash.

(2) It purchases merchandise costing $1,500 million on account.

(3) The firm acquires a new store location, consisting of a building costing $3,200 million and land costing $930 million. It pays cash to the owner of the property.

(4) The firm purchases fixtures for the new store costing $860 million, on account.

(5) The firm pays the merchandise supplier in transaction (2) the amount due.

(6) The firm pays the supplier of the fixtures in transaction (4) half of the amount due in cash. The firm pays the other half by issuing 8.6 million common shares to the supplier. At the time of this transaction, Bullseye Corporationâ€™s shares traded at $50 per share in the market.

a. Indicate the effects of these six transactions on the balance sheet equation using this format:

Assume that during Year 15, Bullseye Corporation, a U.S. retailer,

b. Give the journal entries for each of the sixtransactions.

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... GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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,...