16.1 Effect of Selected Transactions on Net Income and Shareholders' Equity Net Income Retained earnings Total shareholders' equity a. A stock dividend is declared and paid b. Merchandise is purchased on credit I; Marketable securities are sold above cost cl. Accounts receivable are collected e. A cash dividend is declared and paid 1'. Treasury stock is purchased and recorded at cost 9. Treasury stock is sold above cost h. Common stock is sold i. A machine is sold for less than book value j. Bonds are converted into common stock Required Indicate the effects of the above transactions on net income, retained earnings, and total shareholders' equity. Use + to indicate an increase and to indicate a decrease, and 0 to indicate no effect. I). Disney's normal policy regarding buybacks is to retain the shares in treasury (instead of cancelling them). Why is treasury stock a contra-equity account and not an asset? c. Based on the above note, what do you think must have hap- nened to Disnev's share mice from 2006 to 2007'? Did it no no. a docs.google.com in MB-51... in MB-65... P Annota... Item De... P ProQue... = Rafael:.. Bb My Bla... 8 IFRS -... R (PDF) I... G Template.. Homew.. G screen... Template for Chapter 16 Problems * a Share File Edit View Insert Format Data Tools Add-ons Help Last edit was 30 minutes ago 100% * $ % .0 .00 123 - Default (Ca... * 12 BISA DE = 1 H - CO P Y - E . 31 B40 fx K M N 3 Problem 16.1 Impact on : Journal Entry Debi Credit Net Income Retained Earnings Total Shareholder's Equity 9 10 11 C. 12 Pro 13 14 d. 15 16 17 18 19 20 f. 21 22 23 g. 24 25 26 h. 27 28 29 30 31 32 33 34 35 36 41 44 45 + Problem 16.1 - Problem 16.2 * Problem 16.4 - +