Scroll down $to$ complete all parts $of$ this task.

For each $of$ the following independent situations that occurred during Year $3,$ select from the option list provided the appropriate effect, $if$ any, $on$ Company $As$ Year $3$ total balance $of$ shareholders$$ equity. Each choice may $be$ used once, more than once, $or$ not $at$ all.

Situation

Answer

$1.On$ January $15,$ Year $3,$ Company A declared and distributed $a15\%$ stock dividend $on$ shares $of$ common stock outstanding. $On$ that date, the market value was $$20$ per share, and $100,000$ shares $of$ $$5$ par common stock were outstanding.

$2.On$ April, Year $3,$ Company A declared and distributed a property dividend. $On$ that date, the fair value $of$ the property exceeded its carrying amount $by$ $$50,000.$

$3.$ Company A reported a net profit $of$ $$90,000$ for the year ended December $31,$ Year $3.$

$4.On$ May $1,$ Year $3,$ Company A acquired $50,000$ shares $of$ its own $$5$ par common stock $at$ the market price $of$ $$25$ per share. Company A uses the cost method $of$ accounting for treasury stock.

$5.On$ October $12,$ Year $3,$ the shareholders exercised $10,000$ shares $of$ their convertible preferred stock. These $$10$ par$-$value, $8\%$ convertible preferred shares had been issued $by$ Company $Aon$ January $1,$ Year $1,$ for $$30$ per share. Each preferred share can $be$ converted into one share $of$ $$5$ par common stock.

$6.On$ June $1,$ Year $3,$ Company A reissued $3,000$ shares $of$ its $$5$ par common stock for $$27$ per share. These shares had been acquired $by$ Company A during Year $2$ for $$15$ per share. Company A uses the cost method $of$ accounting for treasury stock.

$7.On$ March $1,$ Year $3,$ Company A declared $a2-$for$-1$ common stock split. $On$ that date, the market value was $$22$ per share, and $115,000$ shares $of$ $$5$ par common stock were outstanding.