Assume Dotty Cakes, Inc., completed the following transactions during 2018, the company’s 10th year of operations:

Requirements

1. Analyze each transaction in terms of its effect on the accounting equation of Dotty Cakes.

2. What impact did each transaction have on cash flows?

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Feb Issued 14,000 shares of common stock ($3.00 par) for cash of $406,000. Purchased 2,500 shares of the company's own common stock at $19 per share. Sold 1,900 shares of treasury stock for $25 per share. Declared a cash dividend on the 19,000 shares of $0.10 no-par preferred stock. 3 Mar 19 Apr 24 Aug 15 Paid the cash dividends. Sep Nov 22 Declared and distributed an 8% stock dividend on the 91,000 shares of $3.00 par common stock outstanding. The market value of the common stock was $26 per share.