Analyzing and Identifying Financial Statement Effects of Stock Issuances (FSET)

On September 1, Magliolo, Inc., (a) issues 13,500 shares of $10 par value preferred stock at $48 cash per share and (b) issues 90,000 shares of $2 par value common stock at $37 cash per share. Using the financial statement effects template, illustrate the effects of these two issuances.

NOTE: Use negative signs with your answers, when appropriate.

NOTE: Select "N/A" as your answer if a part of the accounting equation is not affected.

	Balance Sheet												Income Statement
	Cash		Noncash				Contributed		Earned								Net
Transaction	Asset	+	Assets	=	Liabilities	+	Capital	+	Capital				Revenue	-	Expenses	=	Income
i. Preferred stock issuance.	Answer		Answer				Answer		Answer
	AnswerAdditional paid-in capitalCashCommon stockCompensation expenseDividends payablePreferred stockRetained earningsTreasury stockN/A		AnswerAdditional paid-in capitalCashCommon stockCompensation expenseDividends payablePreferred stockRetained earningsTreasury stockN/A				Preferred stock		AnswerAdditional paid-in capitalCashCommon stockCompensation expenseDividends payablePreferred stockRetained earningsTreasury stockN/A
							Answer
							AnswerAdditional paid-in capitalCashCommon stockCompensation expenseDividends payablePreferred stockRetained earningsTreasury stockN/A
ii. Common stock issuance.	Answer		Answer				Answer		Answer
	AnswerAdditional paid-in capitalCashCommon stockCompensation expenseDividends payablePreferred stockRetained earningsTreasury stockN/A		AnswerAdditional paid-in capitalCashCommon stockCompensation expenseDividends payablePreferred stockRetained earningsTreasury stockN/A				Common stock		AnswerAdditional paid-in capitalCashCommon stockCompensation expenseDividends payablePreferred stockRetained earningsTreasury stockN/A
							Answer
							AnswerAdditional paid-in capitalCashCommon stockCompensation expenseDividends payablePreferred stockRetained earningsTreasury stockN/A

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