Question
1.Analyze the following transactions and indicate the effect on each of the following: total assets , total paid-in capital , total retained earnings , and
1.Analyze the following transactions and indicate the effect on each of the following:total assets, total paid-in capital, total retained earnings, and total stockholders' equity. (Make sure to state the effect in terms of increase or decrease with dollar amount, if there is no effect, please state that).
STOCKHOLDERS' EQUITY
PAID-IN CAPITAL
Preferred Stock - $50 par value; 6%, cumulative 2000 shares authorized, 1000 shares
Issued and outstanding$50,000
Paid in capital in Excess of Par - Preferred5,000
Common Stock- $1 par value; 10,000,000 shares authorized, 2,000,000
shares issued and outstanding2,000,000
Paid in capital in Excess of Par - Common19,000,000
Total Paid-in Capital$21,055,000
Retained Earnings9,000,000
Total Stockholders' Equity$30,055,000
Transaction: (each transaction is independent)
a.The corporation declares and issues a 5% stock dividend on the common stock when the fair value of the stock is $12 per share.
b.The corporation declares and pays a regular cash dividend on the preferred stock.
c.The board of directors for the corporation announce a 2 for 1 stock split and issues new shares.
d.The corporation declares and issues a 30% stock dividend on the common stock when
the market price of the stock is $16 per share.
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