Identifying and Analyzing Financial Statement Effects of Stock Transactions Lipe Company reports the following transactions relating to its stock accounts. Feb. 20 Issued 9,000 shares of $1 par value common stock at $35 cash per share. Feb. 21 Issued 14,000 shares of $100 par value, 8% preferred stock at $200 cash per share. Jun. 30 Purchased 1,000 shares of its own common stock at $14 cash per share. Sep. 25 Sold 500 shares of the treasury stock at $20 cash per share.

a. Using the financial statement effects template, illustrate the effects of these 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
2/20 Issued common stock shares	Answer	+	Answer	=	Answer	+	Answer	+	Answer	-	Answer
2/21 Issued preferred stock shares.	Answer	+	Answer	=	Answer	+	Answer	+	Answer	-	Answer
6/30 Purchased own shares.	Answer	+	Answer	=	Answer	+	Answer	+	Answer	-	Answer
9/25 Sold treasury stock shares.	Answer	+	Answer	=	Answer	+	Answer	+	Answer	-	Answer

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

b. Prepare the journal entries for these transactions.

General Journal
	Description		Debit	Credit
2/20	Answer

	Answer	Answer
	Common stock		Answer	Answer
	Answer

	Answer	Answer
2/21	Answer

	Answer	Answer
	Preferred stock		Answer	Answer
	Answer

	Answer	Answer
6/30	Answer

	Answer	Answer
	Answer

	Answer	Answer
9/25	Answer

	Answer	Answer
	Treasury stock		Answer	Answer
	Answer

Answer

Answer

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

Cash
	Answer	Answer
	Answer	Answer
	Answer	Answer

Preferred Stock
	Answer	Answer

Additional Paid in Capital
	Answer	Answer
	Answer	Answer
	Answer	Answer

Treasury Stock
	Answer	Answer

Common Stock
	Answer	Answer

Retained Earnings
	Answer	Answer