Identifying and Analyzing Financial Statement Effects of Stock Issuance and Repurchase

On January 1, 2016, Bartov Company issues 4,000 shares of $100 par value preferred stock at $200 cash per share. On March 1, the company repurchases 4,000 shares of previously issued $1 par value common stock at $79 cash per share.

a. Using the financial statement effects template, illustrate the effects of these two transactions.

Use negative signs with answers when appropriate. When applicable, enter total amount for contributed capital.

Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contrib. Capital	+	Earned Capital	-	Contra Equity
1/1/16 Issued preferred stock.	Answer	+	$Answer	=	Answer	+	Answer	+	Answer	-	Answer
3/1/16 Repurchase common stock.	Answer	+	Answer	=	Answer	+	Answer	+	Answer	-	Answer

Income Statement
	Revenue	-	Expenses	=	Net Income
	Answer	-	Answer	=	Answer
	Answer	-	Answer	=	Answer

b. Prepare the journal entries for the two transactions.

General Journal
Date	Description		Debit	Credit
1/1/16	Answer

	Answer	Answer
	Preferred stock		Answer	Answer
	Answer

	Answer	Answer
3/1/16	Answer

	Answer	Answer
	Answer

Answer

Answer

c. Post the journal entries from b to the related T-accounts.

Cash
	Answer	Answer

Preferred Stock
	Answer	Answer

Treasury Stock
	Answer	Answer

Additional Paid in Capital
	Answer	Answer