Question 1 Identifying and Analyzing Financial Statement Effects of Stock Transactions The stockholders' equity of Gaulin Company at the start of the current year follows Common stock, $5 par value, 350,000 shares authorized 250,000 shares issued and outstanding $1,250,000 Paid in capital in excess of par value 600,000 Retained earnings 346,000 During the current year, the following transactions occurred Jan 5 Issued 10,000 shares of common stock for $12 cash per share Jan 18 Repurchased 4,000 shares of common stock at $15 cash per share Mar 12 Sold one fourth of the treasury shares acquired January 18 for $18 cash per share July 17 Sold 500 shares of the remaining treasury stock for $13 cash per share Oct 1 Issued 5,000 shares of 8 , $25 par value preferred stock for $35 cash per share This is the first issuance of preferred shares from the 50,000 authorized shares (a) Use the financial statement effects template to indicate the effects of each transaction Use negative signs with your answers, when appropriate Balance Sheet Transaction Cash Asset Noncash Assets Liabilities Contributed Capital Earned Capital Jan 5 Answer Answer Answer Answer Answer Jan 18 Answer Answer Answer Answer Answer Mar 12 Answer Answer Answer Answer Answer July 17 Answer Answer Answer Answer Answer Oct 1 Answer Answer Answer Answer Answer Income Statement Revenue Expenses Net Income Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer (b) Prepare the current year stockholders' equity section of the balance sheet assuming that the company reports net income of $65,800 for the year Use a negative sign with your answer for treasury stock Stockholders' Equity Paid in capital 8 Preferred stock, $25 par value, 50,000 shares authorized, 5,000 shares issued and outstanding Answer Common stock, $5 par value, 350,000 shares authorized 260,000 shares issued Answer Answer Additional paid in capital Paid in capital in excess of par value preferred stock Answer Paid in capital in excess of par value common stock Answer Paid in capital from treasury stock (use a negative sign with your answer) Answer Answer Total paid in capital Answer Retained earnings Answer Answer Less Treasury stock (2,500 shares) at cost Answer Total Stockholders' Equity Answer

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Question 1 Identifying and Analyzing Financial Statement Effects of Stock Transactions The stockholders' equity of Gaulin Company at the start of the current year follows:

Question 1

Identifying and Analyzing Financial Statement Effects of Stock Transactions The stockholders' equity of Gaulin Company at the start of the current year follows:

Common stock, $5 par value, 350,000 shares authorized; 250,000 shares issued and outstanding	$1,250,000
Paid-in capital in excess of par value	600,000
Retained earnings	346,000

During the current year, the following transactions occurred: Jan. 5 Issued 10,000 shares of common stock for $12 cash per share. Jan. 18 Repurchased 4,000 shares of common stock at $15 cash per share. Mar. 12 Sold one-fourth of the treasury shares acquired January 18 for $18 cash per share. July 17 Sold 500 shares of the remaining treasury stock for $13 cash per share. Oct. 1 Issued 5,000 shares of 8%, $25 par value preferred stock for $35 cash per share. This is the first issuance of preferred shares from the 50,000 authorized shares. (a) Use the financial statement effects template to indicate the effects of each transaction.

Use negative signs with your answers, when appropriate.

	Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
Jan. 5	Answer		Answer		Answer		Answer		Answer
Jan. 18	Answer		Answer		Answer		Answer		Answer
Mar. 12	Answer		Answer		Answer		Answer		Answer
July. 17	Answer		Answer		Answer		Answer		Answer
Oct. 1	Answer		Answer		Answer		Answer		Answer

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

(b) Prepare the current year stockholders' equity section of the balance sheet assuming that the company reports net income of $65,800 for the year.

Use a negative sign with your answer for treasury stock.

Stockholders' Equity
Paid-in capital
8% Preferred stock, $25 par value, 50,000 shares authorized, 5,000 shares issued and outstanding	Answer
Common stock, $5 par value, 350,000 shares authorized; 260,000 shares issued	Answer	Answer
Additional paid-in capital
Paid-in capital in excess of par value-preferred stock	Answer
Paid-in capital in excess of par value-common stock	Answer
Paid-in capital from treasury stock (use a negative sign with your answer)	Answer	Answer
Total paid-in capital		Answer
Retained earnings		Answer
		Answer
Less: Treasury stock (2,500 shares) at cost		Answer
Total Stockholders' Equity		Answer