Effect of Transactions: The following transactions will change the SFP in some way:

a. Declare a cash dividend, to be paid in three weeks' time.

b. Declare and issue a stock dividend, recorded at fair value.

c. Pay a cash dividend already declared and recorded.

d. Issue common shares for land.

e. Declare and issue a stock dividend, recorded as a memo entry.

f. Record comprehensive income for the period, comprising both earnings and unrealized foreign exchange gains on a foreign subsidiary whose functional currency is the foreign currency.

g. Retire preferred shares for cash at a price higher than average issuance price to date. This is the first time preferred shares have been retired.

Required:

In the table below, indicate the effect of each transaction on the accounts listed. Use I = increase, \(\mathrm{D}=\) Decrease, and \(\mathrm{NE}=\) No effect. The first one is done as an example.

Transcribed Image Text:

Share Capital (Preferred and Item Assets Liabilities Common) Retained Earnings Gains and Losses a NE I NE D NE Reserve for Foreign Exchange Total Shareholders' Equity (Combined Effect of Prior Three Columns) D b. C. d. e. f. 4