E2-6 (Algo) Determining Financial Statement Effects of Several Transactions [LO 2-1, LO 2-2, LO 2-5]

Madison Shoes manufactures athletic shoes and sports apparel. Assume the following activities occurred during a recent year. The dollar amounts in (a) and (b) are presented "in millions," and the dollar amount in (c) is per share. When reporting amounts "in millions," exclude the 000,000.

1. Purchased $254 in equipment; paid by signing a $4 long-term note and fulfilling the rest with cash.
2. Issued $38 in additional common stock for cash contributions made by stockholders.
3. Several Madison Shoes investors sold their own stock to other investors on the stock exchange for $190 per share of stock.

Required:

1. For each of these events, perform transaction analysis and indicate the account, amount (in millions), and direction of the effect on the accounting equation. Check that the accounting equation remains in balance after each transaction.
2. Which statement best describes transaction (c)?
3. Did these transactions change the extent to which Madison Shoes relied on creditors versus stockholders for financing?

Complete this question by entering your answers in the tabs below. For each of these events, perform transaction analysis and indicate the account, amount (in millions), and direction of the effect on the accounting equation. Check that the accounting remains in balance after each transaction. (Enter any decreases to account balances with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10 ).)