Question 3.1(Total: 16 marks)

For the following eight scenarios, pleaseindicate the effect of each of the following transactions ontotalshareholders' equity by placing an "X" in the appropriate column.

Increase

Decrease

No Effect

1. Declaration of a cash dividend.

2. Operating loss for the period.

3. Retirement of bonds at more than carrying value.

4. Declaration of a stock dividend.

5. Exchanging common shares for machinery.

6. Conversion of bonds into common shares.

7. Not declaring a dividend on cumulative preferred shares.

8. Payment of a cash dividend.